of 3 - Center for Global Outsourcings

ENTREPRENEURSHIP IN TIME OF CRISIS: THE OUTSOURCING OF SERVICES THROUGH
FRANCHISE ARRANGEMENTS IN THE ITALIAN FOOD SERVICE INDUSTRY
Giovanni Tamburrini, Solbridge International School of Business
giovanni@solbridge.ac.kr
ABSTRACT
Entrepreneurial spirit of individuals might be strongly affected by macroeconomic factors such
as the world-wide financial crisis. On the one hand, economic uncertainties might lead
individuals to choose to skip their startup projects; on the other hand, the economic
uncertainties are such that the unprofessional implementation of startup projects might bring
consequences which are much tougher than those that would occur in a healthy economic
environment. Moreover, startups are also influenced by the availability of the funds to
accomplish the first investment. In the biennium 2010-2011 many Italians, after having lost their
jobs, decided to launch themselves in the food service industry. Because of the improvised
choice to be entrepreneurs, most of the ventures experienced bankruptcies soon after their
establishment. On the basis of a qualitative and quantitative discussion on the factors which
positively influence the startup and the successfulness rate of the firms, this paper aims first of
all at identifying which aspects should certain business models, formulas and solutions present
in order to address those factors. The analysis therefore demonstrates that the identified
aspects, among which the outsourcing of managerial services is considered to be the most
important, perfectly fit within the franchising arrangements. Despite its general crisis-proof look,
the successfulness of franchising scheme as business strategy needs to be tested in relation to
a specific industry sector. Accordingly, the second part of the paper studies the relationship
between franchising and the Italian Food Service Industry with the purpose of comprehending
for which subsectors – restaurants, cafeterias, bakery industry – the outsourcing of certain
managerial services might turn out the winning choice for prospective entrepreneurs.
In particular, the analysis, considering:
a) the changed and changing Italian consumer preferences, either in terms of gastronomic
culture and in terms of lowered purchasing power brought by the economic crisis;
b) the assumption according to which franchise arrangements in the food service industry
better work when marketing “non-complex” products,
concludes that the bakery industry might well represent a suboptimal equilibrium that
international franchisors, especially the South Korean ones, should consider whereas they
decide to expand their business overseas.
Key words: Franchising, Entrepreneurship, Food Service Industry, Business Strategy,
Giovanni Tamburrini earned his Ph.D. in Commercial and Uniform Comparative Law (2010) and his
bachelor degree in Private Comparative Law at Sapienza University of Rome (2006). He also has an LLM
in Corporate Governance and Public Policy from the Queen’s University of Belfast (2008). During his
academic career he participated in several international programs through which he had the chance to
study for one year in Brazil, Finland and at the Rome Law Summer School of the Temple University of
Philadelphia. In 2011 he has worked as legal consultant at the Swiss Institute of Comparative Law,
Lausanne. He is currently external adviser of the Serbian Institute of Comparative Law. His research
focuses on corporate governance and international economic law.
Tenth Annual International Daejeon, South Korea P a g e | 31
Smart Sourcing Conference June 28-29, 2012