RESILIENCE OF FRANCHISE SYSTEMS IN THE UNITED STATES AND POLAND TO SHOCKS ON THE EXAMPLE OF THE COVID-19 PERIOD

Abstract

The article deals with the issue of franchise as a distribution system. Participation in such systems brings many benefits, both for franchisors and franchisees. Still, the uneven bargaining power of the parties is significant, and effective actions require mutual trust and a certain autonomy of the parties. The work aims to determine how franchise systems reacted to the crisis caused by, among others, COVID-19 and whether food industry systems were characterized by higher resistance to shocks. The assessment was made based on data from the USA and Poland on the franchise according to the International Franchise Association and Profit System Sp. z o.o. for the years 2007-2021, and subject to availability for a longer period. It found that the franchise sector shrank by around 10% during the pandemic, but after two years, the level of turnover and employment returned to pre-crisis levels. In the USA, food distribution and restaurant systems were more resilient to the lockdown crisis and quickly recovered to their previous turnover and employment levels. In Poland, the gastronomy brand industries accounted for as much as 35% of the systems, and grocery and industrial stores accounted for another 29%. The franchise industry turned out to be resistant to crises, and the high share of food distribution indicates that franchise systems are an effective solution in the food trade, mainly due to an efficiently organized supply chain and lower distribution costs.