Final answer:
Success in franchising is significantly influenced by proximity to suppliers and customers, quality infrastructure for transportation and communications, taxation policies, and the local government's competence and integrity.
Step-by-step explanation:
The key factors that influence the success of franchising approaches include monitoring costs, the principal's international experience, and other critical elements such as the cost of labor and financial capital, proximity to reliable suppliers and customers, the quality of transportation, communications, and electrical power networks, the level of taxes, and the competence and honesty of the local government. These factors are essential because they can significantly impact the operations and profitability of a franchise. For instance, a well-located franchise can attract more customers due to its accessibility, just as a gas station on a busy intersection would.
Moreover, efficient supply chain management is vital for reducing operational costs and ensuring that franchises maintain consistent quality and service standards. A solid relationship with suppliers can ensure timely and cost-effective delivery of necessary inputs. Effective communication networks facilitate management and coordination between the franchisor and franchisee, ensuring that any challenges are promptly addressed and best practices are consistently applied.
In summary, besides monitoring costs and international experience, the presence of suitable infrastructure, and a supportive and transparent local government are imperative for the growth and success of a franchising business.