Franchising In the System of Polish-Ukrainian Economic Relations and Ways of Its Development

Running head: FRANCHISING IN THE SYSTEM OF POLISH-UKRAINIAN ECONOMIC RELATIONS AND WAYS OF ITS DEVELOPMENT 1FranchisingIn the System of Polish-Ukrainian Economic Relations and Ways of ItsDevelopmentInstitutionalAffiliationFranchisingIn the System of Polish-Ukrainian Economic Relations and Ways of ItsDevelopment

Polandand Ukraine have different economies such the economy of the formeris far much developed than that of the later. This is essay is meantto offer ways that can assist the economy of Ukraine grow like thatof Poland. The economy of Ukraine can only be improved through a boldand urgent change, and one of the propositions is that Ukrainerequires franchising its systems of the economy with Poland(Krawczyk, 2008).Ukraine as a country is facing a lot of challenges, which are notonly political but also economic. The country’s currency is weakagainst the dollar such that it trades at around 10:1. The importanceof Ukraine entering into franchising with Poland is to help Ukraine’seconomy grow and reform like that of Poland. It is very unbelievableto imagine that in 1991, both Poland and Ukraine had the same GDP perhead but when the comparison is made now, the Polish GDP is more thanthree times that of Ukraine (Asbill, &amp Goldman, 2001).Transformations in the economy of Poland required political will andrational decisions and the effective cooperation between thepolitical parties, parliament, and the government. The process tookthe country a lot of commitment in terms of required technicalcapacity and the personnel to work over a sustained period to ensurethat it was a success. The process required a lot of support all overthe society. We all understand that Ukraine has taken a differentapproach from Poland, and that is why the two economies cannot becompared in the same way (Hendrikse,Tuunanen, Windsperger, &amp Cliquet, 2008). Theconditions for the operation of the business in Ukraine have neverbeen the same as they are at the current moment. This is why the twocountries are required to form a franchising to ensure that theeconomy of Ukraine expands and grow in the same way as that ofPoland. The paper, therefore, seeks to find out how franchising canbe carried out in the system of Polish-Ukrainian economic relationsand propose the ways that can lead to its development (Doherty,&amp Alexander, 2004).

Importanceof Franchising In the System of Polish-Ukrainian Economy

Franchising provides unhindered business opportunities for all thePolish and the Ukrainian citizen, and it is relevant to the people’seconomic and political well-being (Altinay,&amp Miles, 2006).For Poland to retain its leadership in bringing new goods andservices in the international and local market, franchise systemscontinue to offer the widest business opportunities for every citizenof the country. Ukraine has many resources that are untapped and,therefore, Poland should take the advantage of the situation inUkraine to grow its economy further. Though Poland will be benefitinga lot from the franchise, the Ukrainian economy will also beaccelerated by the move.

Asglobalization increases with time, Ukraine should seek help byexpanding its business operations with the top performing economieslike that Poland, which will help it expand its business in theinternational, landscaped (Quinn,&amp Doherty, 2000). Franchisingwill help Ukraine and Poland to expand their business opportunitiesand attain strong growth possibilities for the most neglected groupin the society like the women, veterans and people who are physicallyand mentally challenged in life (Asbill, &amp Goldman, 2001). Thenumber of jobs will be increased in both countries because franchisedbusinesses assist in adding jobs to many industries that develop inthe process. The mutual relationship that exists between thefranchisees and the franchises for instance in our paper we havePoland and Ukraine will make the franchising system unique andpowerful in the field of business. Franchisees are a head start tothe system to due to their great support they provide the franchisorto make sure that the system operates successfully (Altinay,&amp Wang, 2006).

Howto Carry Out Franchising Between Poland and Ukraine

Poland should support Ukraine as a major partner of the franchise inevery way possible since the former is more developed when comparedto the later. Poland should mobilize its resources abroad with a widerange of instruments to assist respond to Ukrainian needs (Alon,&amp McKee, 1999). Thetwo countries should sign bilateral contracts to support thefinancial segment of the franchise and help expand the businessinternational and not only relying on the local markets. The majorityof funding should be intended to reform the situation that thecountries seek to co-ordinate with each other in the investor and thedonor community (Whitehead,1991).The two countries should formulate an agreed reform priorities underthe same Association Agenda and their conditionality. This willensure that the reform process moves forward in terms of electoraland constitutional reforms, judicial reforms, fighting corruption,deregulation, public administration reforms, audit reforms, taxreforms and energy sector reforms.

Thecountries financial support should assist each other to bridge thebudget deficit and help accelerate the growth of the two economies(Huszagh,Huszagh, &amp McIntyre, 1992). Alongsidethe financial support, Poland and Ukraine should offer advice andexpertise to each other when needed by the either part. The countrythat is rich with experts should provide the other with the requiredtechnical assistance on the way to draft the legislation and supportthe ministers to develop the reform strategies in the key sectors ofthe economy. The key areas that require reforms especially in Ukraineare agriculture and energy since these two are the major sectors thathelp the country to realize economic growth. All citizens depend foragricultural products for consumption process while energy helps theindustries to run their daily operations (Altinay,2004).

PercentageChange, Real GDP Percapita (PPP basis), 1992-2013

TheRole of Trade in Ukraine`s Economic Development

Theintegration between Poland and Ukraine will be important to therecovery of the Ukrainian economy. The country should aim todiversify its export markets and establish trade relations withPoland to help it grow its economy like that of Poland. The countryshould also ensure that nothing from the franchise limits it fromtransacting with other countries abroad since this is dangerous andcan constrain it from growing further (Paneyko,1931).The franchise should help each country determine its own trade policythat will further assist them to trade with other different countriesin many parts of the world. The following are the areas that needimprovement and the franchise should address them if at all eachcountry have to benefit from the franchise:

  • The energy sector- there should be an agreement in the franchise that states how the countries should restructure their energy sectors. This is because for any business to be successful, the energy sector needs to be very competitive and effective. This is because all the sectors of the economy depend on energy for their daily operations. According to (Smallbone, &amp Xheneti, 2012), Ukraine should improve the energy sectors to help grow its economy like that of Poland. Poland has a well-established energy sector and is what has helped its economy grow three times more than that of a Ukraine in only twenty years (Kwansa, &amp Parsa, 2014).

  • Political and legal reforms- these two are important as they will assist Ukraine protect the interest of its traders over-exploitation by the external partners. The poor political environment in Ukraine has hindered the country’s economy to grow. Most of the investors have shunned investing in the area since a poor political environment puts the business at risk than when the situation is stable. On the other hand, the situation is stable in Poland and, therefore, Poland has a big role to ensure that the political environment of Ukraine is stable to support the franchise and the economy of Ukraine (Isakova, Gryga, &amp Krasovska, 2012).

Conclusion

Polandstarted franchising with other countries from as early as 1989. Thisis to say that the country has enough experience to help Ukrainedevelop its economy through entering into a franchising system.During that time, the investment risk was very high in Poland due tothe instability of the economy in terms of political risks and otherbusiness related risks like the way it is in Ukraine. This,therefore, shows why Poland is the best country to form a franchisingsystem with Poland due to a vast experience that Poland has in thearea of franchising (Duckett, &amp Monaghan, 2011).

Table1: Franchise systems in Poland between 1989 and 2013

Year

No. ofsystems

Year

No. of systems(2nd version

1989

2

2001

142

1990

4

2002

173

1991

7

2003

213(216)

1992

13

2004

251(256)

1993

17

2005

298(309)

1994

23

2006

312(328)

1995

31

2007

382(402)

1996

43

2008

480(512)

1997

60

2009

565(618)

1998

77

2010

660(739)

1999

95

2011

805

2000

119

2012

864

2013 Forecast

930

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