A Comparison of Business Environments between Global Franchises and Local Enterprises in Mongolia: Evidence from the Food Service Industry

This study compares the business environments of global food service franchises with local food service enterprises in Mongolia. In recent years, the global franchising business has developed very quickly in Mongolia. To understand the business environment in Mongolia, we analyzed the advantages and disadvantages of global food franchises and local food service enterprises in Mongolia. For this purpose, we employed a survey research design, and a questionnaire was used for data-gathering. The survey was conducted on 12 global food service franchisees and 13 local food service enterprise owners operating in Mongolia. Analysis of the survey results shows that in determining opening hours, prices, new products or services, innovation or improvement, system flexibility, etc., local enterprises are more flexible than global franchises. When they start their business, both global franchisees and local enterprises need huge money because of royalties, store interiors, etc. However, local enterprises have more difficulty supporting employment and training, marketing, business planning, etc. as compared to global franchisees. Global franchisees think that customers care about brand names, whereas local service enterprises think customers don’t. This research is restricted by its sample size, which is due to the limited number of franchisees in Mongolia. However, our research results provide a good reference for global food service franchise companies that plan to invest in Mongolia or compete with local food service enterprises in Mongolia.