Background and Purpose
Franchising represents a distinctive business model in which a company grants another party the authority to sell its products or services in exchange for a fee known as the franchise amount. Franchise services vary widely depending on factors such as the scope of operations, historical context, and the power dynamics inherent in each franchise type. Generally, franchising can be categorized into two main systems. The first is product franchising, which involves a contractual distribution channel established by the franchisor for the sale of a product brand. The second, and more prevalent form, is business format franchising. In this model, the franchisor, who owns a well-established product or service, authorizes the franchisee to sell the product or service under the franchisor’s brand name. This arrangement leverages economies of scale, enabling the franchisee to benefit from the collective strength of a recognized brand, as well as national and international marketing, promotional activities, bulk purchasing, and training programs. The franchise agreement typically specifies critical operational conditions such as the products to be sold, quality standards, pricing, working hours, launch dates, contract duration, renewal terms, and termination clauses.
Most existing research on franchising is grounded in resource scarcity or agency theory. The scarcity of resources perspective views franchising as a mechanism to alleviate financial and managerial constraints during business growth. However, there is a notable lack of comprehensive models that holistically capture the factors influencing franchise development, particularly within the sports industry. To address this gap, the current research employs a grounded theory approach to discover and conceptualize the relevant factors and to propose a franchise development model tailored specifically for the country’s sports industry.
This study seeks to answer several critical questions: What are the relevant factors affecting franchise development in the country’s sports industry? What strategies drive franchise development in this sector? What are the consequences of franchise development for the sports industry? And finally, is the proposed franchise development model suitable and effective for the country’s sports industry context?
 
Methods
The research adopts a mixed-methods design, integrating both qualitative and quantitative approaches to comprehensively explore and validate the franchise development model. The qualitative phase involved purposive sampling of prominent experts in sports management and business, including entrepreneurs, manufacturing managers, service company executives, university professors, and sports instructors affiliated with growth and technology centers. A total of sixteen semi-structured interviews were conducted, continuing until theoretical saturation was achieved. The selection criteria emphasized expertise in sports business and active involvement in sports decision-making processes.
Following the qualitative phase, the open codes derived from the interviews were synthesized into a structured questionnaire for the quantitative phase. This questionnaire comprised two sections: demographic characteristics of respondents and ninety-three items reflecting the qualitative findings. The questionnaire utilized a five-point Likert scale to capture the degree of agreement or relevance of each item.
To ensure the validity of the questionnaire, twelve sports management doctoral experts reviewed the instrument for content and face validity. Additionally, the Content Validity Ratio (CVR) method was applied to refine the questionnaire items, ensuring their appropriateness and relevance based on expert feedback.
The finalized questionnaire was distributed to a larger sample of sports business stakeholders across the country, enabling the collection of quantitative data to test and validate the proposed franchise development model using statistical techniques.
 
Results
The analysis revealed a multi-dimensional franchise development model in the country’s sports industry, comprising several interconnected categories and factors. Four primary causal conditions emerged: renovation capital, innovative investment, innovative operating processes, and positive credibility. These foundational elements set the stage for franchise development by providing necessary resources, fostering innovation, streamlining operations, and building trust among stakeholders.
Contextual factors were identified as critical in shaping the environment within which franchises operate. These included the creation of social experiences, intellectual experiences, accelerating factors, and enabling conditions that facilitate franchise growth and sustainability.
Intervening variables encompassed both individual and organizational consequences of franchise development, reflecting the dynamic interplay between personal capabilities and institutional frameworks.
Among the sub-categories, the creation of government policies and financial concentration were highlighted as pivotal. Effective government policies provide regulatory clarity and support, while financial concentration ensures the availability of capital and investment necessary for franchise expansion.
The model also incorporated elements of national pride, semiotics, and risk reduction in investment decisions. National pride serves as a motivational force encouraging local engagement and support for domestic franchises. Semiotics, or the study of signs and symbols, relates to brand identity and consumer perception, which are vital for franchise success. Risk reduction mechanisms enhance investor confidence and stability within the franchise ecosystem.
Quantitative validation of the model confirmed the significant effect of each identified factor, with corresponding t-values indicating strong statistical support. The overall framework of the franchise development model for the country’s sports industry demonstrated good fit indices, affirming its suitability and robustness.
 
Conclusion
The findings of this research underscore the transformative potential of franchising as a driver of economic growth and national pride within the sports sector. The establishment and expansion of franchises can stimulate private sector involvement, which is crucial for diversifying and strengthening the sports industry.
To capitalize on this potential, it is essential to enhance the financial discipline of government bodies and develop competitive, cohesive financial markets that facilitate access to capital for sports enterprises. Creating an environment where private sector sports businesses can obtain bank resources with attractive terms and lower costs is vital for franchise proliferation.
Moreover, the study highlights the importance of strategic government policies and concentrated financial support to nurture franchise growth. These measures, combined with fostering innovation, operational excellence, and positive brand credibility, can significantly elevate the competitiveness and sustainability of sports franchises.
In conclusion, the research offers a comprehensive and empirically validated model for franchise development tailored to the unique context of the country’s sports industry. This model provides a valuable framework for policymakers, sports managers, and entrepreneurs seeking to harness franchising as a catalyst for sports business development and broader economic advancement.
 
Article message
The aim of this research was to analyze the development of franchises in the country's sports industry, which was carried out using a mixed exploratory method, and ultimately it was determined that specific and precise laws and regulations need to be established to expand franchise avenues.
Ethical Considerations
This research was conducted in compliance with specific ethical principles.
Authors’ Contributions
Reza Mahdian 45%, Mohammad Soltan Hosseini 35%, and Ghasem Rahimi Sarhebadrani 20% contributed to the research.
Conceptualization: Reza Mahdian, Mohammad Soltan Hosseini contributed to the ideation of the article.
Data Collection: Reza Mahdian contributed to the data collection of the article.
Data Analysis: Reza Mahdian, Mohammad Soltan Hosseini, and Ghasem Rahimi Sarhebadrani contributed to the data analysis of the article.
Manuscript Writing: Reza Mahdian, Mohammad Soltan Hosseini, and Ghasem Rahimi Sarhebadrani contributed to the writing of the article.
Review and Editing: Reza Mahdian, Mohammad Soltan Hosseini contributed to the review and editing of the article.
Responsible for funding: Reza Mahdian, Mohammad Soltan Hosseini contributed to the review and editing of the article.
Literature Review: Reza Mahdian, Ghasem Rahimi Sarhebadrani contributed to the review of the literature of the article.
Project Manager: Mohammad Soltan Hosseini contributed to the review and editing of the article.
Conflict of Interest
According to the declaration of the authors, this article has no conflict of interest.
 
Acknowledgments
This section lists the source or sources of financial support that led to the research and preparation of the article, and thanks and appreciation are given to all individuals or groups who contributed to the research.