Y o u t h   C o n s u l t a n c y   A g e n c y                                                                                                                                                      B u r g e m e e s t e r   O u d l a a n   5 0                                                                                                                                  3 0 6 3   P A   R o t t e r d a m          

Expansion  strategy  for  The  Study  Road:  “friendchising”  model      Consultancy  report    by  Youth  Consultancy  Agency  Anastasia  Semenko                                                                                                                                                                                                                                                                        Claudine  Maas                                                                                                                                                                                                                                                                                              Yannick  van  Riet                                                                                                                                                                                                                                                                      

November  7  

  1  

© 2014 by Youth Consultancy Agency, Rotterdam Authors: Anastasia Semenko 420031 Claudine Maas 368787 Yannick van Riet 373261 Commissioned by The Study Road All Rights Reserved

  2  

Table of Content Page

1. Executive Summary 3.

2. Introduction 4.

3. Expansion strategy: franchise 9.

4. Franchise model suggestions 12.

5. Building the “friendchise”:

short- and long-term recommendations 16.

6. Conclusion 19.

7. Literature 20.

8. Appendix Group Assignment 21.

  3  

1. Executive Summary Currently, The Study Road (TSR) is puzzled by the question how they can expand their organization internationally. In this report, it is argued that the most effective way to expand is through a franchise model, because of franchisee’s specific knowledge of the local market, moderate costs and time required for control of franchisee’s operations. This expansion can only be implemented by TSR if it includes internationalization, increase in participation, increase and segmentation of volunteer pool and hired personnel. To come to this overall recommendation, we conducted theoretical research by doing a literature review and reflected and expanded our initial ideas by conducting a semi-structured interview with one of the founders of a successful franchise concept; Seats2Meet. As a result, we recommend TSR to employ the “friendchise” model as the expansion strategy. “Friendchise” is cooperation based on the shared vision and goals. On the contrary to the regular franchise, the control and feedback communication is not only hierarchical, but also horizontal. “Friendchise” model is highly flexible and adoptive to the changes in the market, and it is designed to stimulate innovation. The TSR Board based in the Netherlands will keep the tasks of formulating the initial vision and strategy, and realizing that strategy in global marketing, management and educational program development. Meanwhile, the “friendchises” overseas will be involved in vision evolution and development, contributing to the educational program, testing pilot projects and sharing the successful ideas with the other “friendchises” and the Board. In order to make the transformation to “friendchise” model successful, we advise TSR to complete two preconditions as an action points for TSR for the nearest future:

• Communicate the vision of TSR. The worldwide network of TSR friendchises will be collaboration based on the shared vision. We propose a preliminary version of the vision statement of TSR: “To develop a worldwide network of unique cycling & personal development routes, so that in 10 years employers will ask the job applicants why they did not join The Study Road”.

• Create strong incentives for entrepreneurs to franchise TSR. The franchisees of TSR will open their local organizations because they share your vision and they want to promote the principals of TSR. Clearly communicated unique “selling points” of TSR such personal development, hands-on leadership training, traveling experience and other will crate even greater engagement and incentives for entrepreneurs.

Expansion through creating a “friendchise” is a complex process, and in addition to the main findings presented above, the report also contains a list of short- and long-term recommendations to apply while building the “friendchise” network. We conclude this consultancy report with ‘TSR for dummies’, an extensive manual on becoming TSR franchisee.

  4  

2. Introduction The introduction provides basic information about The Study Road, describes the consultancy request from The Study Road to YCA and introduces the content of the report. Background information TSR In 2008 Joya van Hout participated in the Tour d’Afrique, a 12.000 kilometre long biking tour from Cairo to Cape Town. This experience inspired her to come up with the idea of The Study Road. During several periods abroad she discovered that the ultimate way of studying and self-development is to combine the bicycling with an international education program. In 2011 The Study Road was founded. The project began with the Silk Route, a 12.500 kilometre long road from Istanbul to Beijing. In the first edition, participants would book a full package that included accommodation, meals, transportation and, of course, the educational block. The Study Road team wanted to make the participants more proactive and more adventurous in the next edition. This goal was reached by transforming the second edition in to a challenge for the participants: the Study Road was only providing the educational program, all other components of the trip (visas, accommodation, meals, travelling schedule) were organized by the participating team. The form of The Study Road is a non-profit foundation. This legal form was chosen because The Study Road is a not for profit organization. Also, this legal form has several advantages such as limited liability, no minimum capital requirements and no members and/or shareholders. For The Study Road this was the easiest and best fitted form. On a day to day basis there are five people active in the foundation. The General Board consists of three people; Joya van Hout as the President, Mark van Heeringen as the Treasurer and Miguel Rodriquez as the Secretary. Mark van Heeringen is mainly responsible for the educational part, the personal development component and marketing. At The Study Road there are two interns. Ammie Roeten is a marketing and graphic design intern, and Manizha Kodirova is a manager in marketing and communication. The Study Road provides all the information, education and support so participants can follow the chosen route. For now, there is only one route, the Silk Route. The route brings participants through 7 countries and has stops at 8 different universities. It takes participants five and a half months to finish the complete route. The challenge of The Study Road for participants is that they need to arrange everything by themselves: divide tasks within the team, plan timing, find accommodation, search for the best routes, and meet new people who can help them on the road. The feeling of finally finishing in Beijing is one of the greatest feelings ever, according to participants.

  5  

Analysis of The Study Road Mission The primary mission of ‘The Study Road’ is for participants to discover that they are capable of so much more than what they would expect from themselves. ‘The Study Road’ aims to provide education that is not offered in the current education system. Leadership skills and personal development are the core interest. The ultimate goal of ‘The Study Road’ is to create a worldwide network where different universities, students and individuals share knowledge and experiences. In 2018 TSR is aiming to have 7 study roads through North America, South America, Europe, Africa, Australia, South-East Asia and the Silk Route from Istanbul to Beijing. The network of 7 routes will allow the participants to build a truly world wide network. Core competencies The organisation of The Study Road is very flat and clear. Thanks to the fact there are only five people who are really working for The Study Road, volunteers and interns; it is a very informal and welcoming organisation. Everyone acts in a cooperative and informal way, which makes it an attractive organization for all of the volunteers, inters and other stakeholders.The informality and the cooperative attitude provide a very strong independent working culture. Joya van Hout gives one the feeling that everything you do or willing to do is welcomed by the organisation. In that situation and in many others you perceive that Joya is the driving force of The Study Road and she will try to engage everyone wherever she comes. Together with Miguel Rodriguez they are an enthusiastic team with different international experiences. The Study Roads requires flexibility and proactive mindset from its team members: there is no regular office, the meetings are scheduled in meeting space and cafés, and the participant’s initiative is crucial for the working process. Internal analysis The financial part is straightforward. The Study Road does not receive any money from government or other organisations. The only source of revenue for TSR is the participations fees from the persons that join the trips. During our several meeting with TSR team we have noticed the informality of communication that we enjoyed with them. The Study Road is an informal, but certainly task-oriented organization. The task orientation is well-realized by the team member, everyone recognizes his or her large responsibility, and that is the engine that keeps moving the organization.

  6  

TSR has contact with several federal institutions: at the moment the Ministry of Foreign Affairs is the most helpful for organizing the trips. Several embassies provide help and contacts with universities, professionals and other stakeholders in the countries where TSR participants travel to. External analysis Porter’s model1 is a standard tool of external analysis of an organization. For-profit and non-profit organizations are all affected by the same factors described in the model. Porter’s 5 forces are also suitable to analyse the Study Road, with some additional points.

Rivalry According to the Study Road there are no direct competitors to their foundation. They are the only organization that offers a combination on an extremely challenging bicycling route and a self-development educational program. Thus, within their ‘industry’ the Study Road is currently a monopolist. New Entrants The Study Road has a strong competitive advantage of the learning curve and ‘economies of scale’ meaning their experience and the network built during the first 2 editions. On the other hand, the costs are low and the exit barrier is minimal. Speaking in Porter’s terms, the entry barrier for the new competitors is moderate to low. Suppliers The Study Road as a foundation does not have suppliers in a strict definition. Several organizations such Gazelle, Seat2Meet, AirBnB, Coachsurfing provide some necessary products and services on a sponsorship basis. They are not dependant on the Study Road’s

                                                                                                               1 Porter, M. The Five Competitive Forces That Shape Strategy. Harvard Business Review, 1979.

  7  

purchases, and nothing limits their bargaining power. On the other hand, they provide this help voluntarily and they do not seek bargaining opportunities. All these organizations have a potential to enter the ‘industry’ of the Study Road, but they all are successful in their primary activities. Buyers The relation of Buyers and the Study Road can only be partially described within the Porter’s model. Currently, the buyers are few, but they do not have much bargaining power. The standard Porter’s model discusses the threat on entrance of the buyers to the market. Since the Study Road is planning to start franchise and to forward this franchise to their former clients/participant and other bicycling enthusiasts, they are turning the entry threat into their competitive advantage. Instead of the hypothetical threat of entry, as described by Porter, TSR sees their clients as potential members of the future TSR network. Also, buyer actively spread the word about TSR. In this way, the clients are very supportive for TSR. Substitutes The number of substitute products is endless, depending on a scope in which one considers the Study Road. Competing on the ‘market’ for the gap year activities, the Study Road competes with such substitutes as volunteering projects, travelling projects, educational and work exchange programs. Talking about the self-development and leadership training, there summer schools and other educational programs. Consultancy Request As mentioned above, TSR has a really strong future vision driven by the expansion goal. TSR wants to expand their organization from one road at the moment, The Silk Road, to roads all over the world. For an organization like TSR this is an ambitious goal to reach, but thanks to the strong vision the ambitious expansion appears to be possible. When YCA was asked to provide consultancy advise, TSR came up with some interesting questions and challenges. The question about how to expand TSR all over the world was one of the most interesting questions and would mean a lot for TSR. The consultancy request for YCA was the following: ‘’Is there a possibility to develop a new business model that enables TSR to expand the current study road program, to other parts of the world and achieve the 7 roads in a way that even a small core organization can run them all?’ This question should be seen in the situation of the TSR, which you can read in the organization analysis. TSR is a small organization with a large impact in the meaning of network. The carefully build network of TSR all over the world, particularly, along the Silk Road, is one of their main strengths. To make all the 7 roads working the network of TSR have to become even bigger than it is at the moment.

  8  

However, increasing the network and expanding the organization within the Netherlands would not suffice for the goal of international expansion. Having the strength and weaknesses of TSR in mind, we started our enquiry to offer an optimal expansion strategy. 3. Expansion strategy: franchise

  9  

Expansion is the future for The Study Road, but how can they do it? In this chapter we will describe why we chose a franchise model above several other options and give advantages and disadvantages of the franchising.

Expansion Lots of international non-profit organizations expand all over the world. All these organizations are big organizations with large budgets and big political influences. (Anheler & Themudo, 2005). An organization can expand in three ways; first is to place branches in different countries and keep the management of the organization in own administration in their headquarters (Anheler & Themudo, 2005). For The Study Road this would not be an option, because they do not have the capacity to expand in this way. They do not have time to set up a branch abroad and there is not enough money to invest. The Study Road could also collaborate with already existing companies abroad. In this way they will not need a large amount of money to invest and can use the contacts en facilities of the existing companies (Anheler & Themudo, 2005; 103). The problem is that there is no organization like The Study Road. There are several organizations that organize trips, but all on a commercial base and none of them provide a learning part in the trips. The Study Road could work together with a for-profit travel company and provide the learning part or the knowledge to set up a trip with learning components in it. . Advantages of franchising The advantages for franchisers, but also for franchisees, are of great value. For franchisers the most valuable advantages can be found in the cost for the expansion and the monitoring cost which will be low compared to expansion by opening branches and offices in other countries (Franexcel, 2014). The operation costs will be reduced because of low investments in building costs, loans and other overhead costs. The capital injections needed to set up branches abroad are not required for franchisers (Franexcel, 2014). And the capital which is required to set up some business is covered by the franchisee, and not for the franchisors. For franchisors it is an attractive expansion plan when all the cost are taken by the franchisor (Entrepreneur, 2014). Compared to the investment needed from the franchisor the profits are really high, because a lot of costs will be taken by the franchisee and the profits will partly go the franchisor (Franexcel, 2014). The shared responsibility is also a big advantage for franchisors, particularly for small businesses and organizations. The impact of some failure by one of your franchisees will not be that large because the main responsibility is not in the hands of the franchisor (Entrepreneur, 2014). Beside of that, in the start up period of a new business by a franchisee, the franchisor can continue its normal operations and strengthen the business. Especially for

  10  

small businesses and organizations to keep their businesses running is really important (Franexcel, 2014). The knowledge of the local market is one of the biggest advantages for franchisors because that is one of the biggest pitfalls for new businesses. New franchisees know what the local market needs and what the demands are from the new customers. The franchisees can respond quickly to local changes and proceedings (FDS, 2014) For franchisees is the big advantage that they can learn from the knowhow of a franchisor in the business and combine it with their knowledge of the local market to create a successful franchise. The marketing concept of the franchisor is easy to implement for the franchisee and the costs are lower because the franchisee do not have to pay for creating new marketing materials. The franchisee can also have advantage of the recognized trade name which can give more demand for the franchisee. (Franexcel, 2014). Disadvantages of franchising To set up a franchise is a big step that also has some disadvantages. One of the main disadvantages for franchisors is the lack of control to franchisees. Because a franchisee has a lot of own responsibilities and is not a direct office of the franchisor. Of course the franchisor can have some control, but it is not reasonable to have all the control over the franchisee. It is understandable that a franchisor wants to control the new franchisee, because the trade name can be affected by mismanagement of the franchisee. Also the confidential information of the franchisor can be used for inappropriate purposes which can harm the franchisor in different ways. The confidential relation of franchisor and franchisee is based on trust, but for a franchisor it can be difficult to decentralize some of their current businesses (Franexcel, 2014). Normally a franchisee has to pay fees and royalties to the franchisor which can be a disadvantage and demotivating for the franchisee. Also the control from the franchisee and the relation between the franchisee and franchisor, in which the franchisee is the subordinate and has to do in some ways what the franchisor wants. The franchisee also has to use the standards, policies and systems of the franchisor which means they can not invent things by themselves and choose for systems of standards they think it is the best for them (Franexcel, 2014). Pros and cons of franchising for TSR Franchising is a traditional business model. First, to figure out if The Study Road should franchise, they must ask themselves what advantages they can derive from operating franchised stores versus operating company-owned stores. One of the big advantages is that there is no capital required to start a franchise. The Study Road could not, for example, open a company-owned store because it requires a large amount of capital. Starting a franchise is

  11  

also a good way for The Study Road to judge the profitability potential of different continents without incurring business risk. Secondly, to evaluate the franchise option, The Study Road needs to outline the linkages between the product-market characteristics of its business and the different advantages franchising provides (Tikoo, 1996). If The Study Road would start company-owned stores all over the world, supervisors must travel to all the stores to see if everything goes according to the standards. When The Study Road decides to franchise, the monitoring costs go down. The franchisee will have supervisors. One of the biggest advantages for The Study Road to franchise is they could entrust business to a franchisee who is familiar with the local market. The Study Road would save a lot of money obtaining knowledge about the preferences of local consumers. Although there are many advantages starting a franchise chain instead of opening company-owned stores, there are also disadvantages. For example, the monitoring costs of franchises with transient participants are very high. The Study Road will have transient costumers, which means they will never return. The chance someone will do a specific Study Road twice, is very small because the knowledge and skills obtained during the road can only be obtained once. When a franchisee offers a Study Road that is below the standards, participants will develop a negative perception of The Study Road and the entire franchise chain. Since the participant is not likely to participate in The Study Road whether they had a positive or negative experience, Franchisees are more likely to not improve the quality of their franchisers. Therefore, there is a need to monitor all the franchises closely and the monitoring costs will be high. All in all, franchise has several substantial advantages for TSR. In our research we viewed this conclusion deriver from literature review from the perspective of practice. In the following chapter, information from the field is discusses. 4. “Friendchise” model suggestion

  12  

In this chapter we have formulated our advice on the franchise model. In addition, we will provide the TSR with a step by step plan for setting a franchise titled “TSR for Dummies” (Appendix 1). “Friendchise”: the Seats2meet story of success In order to provide a data-driven advice, the findings of the literature review were tested in the field. We have conducted an interview with one of the founders of Seats2Meet, a network of co-working spaces that operates on the basis of franchising model. The conclusion was that the actual business model of Seats2Meet can be referred as “friendchise” rather than franchise. Before applying the concept to TSR, the “friendchise” model requires short explanation. The following table compares the two models2. Franchise Friendchise A traditional business model A hybrid of franchise and creative

collaboration Incentives: creating a cash-cow business Incentives: collaborating on the basis of

shared vision Hierarchical organizational structure Horizontal and vertical feedback and

communication, emphasis on sharing innovation

Seats2Meet business model has proven to be successful. Initially, the new franchisee could have joined the network based only on his or her vision complying with the original Seats2Meet vision. There were no royalties involved, such as in a traditional franchise, and the Seats2Meet headquarters was receiving income only when a new franchisee was generating profit: “We wanted other entrepreneurs to join the vision of the world we are creating. We wanted to do it in collaboration. We wanted to avoid big overhead, which is one of the pitfalls of franchise. We didn’t feel it was necessary. All the control over the operators. We said: if you want to use our software – it is great. It is for free. And when you start making money, we also make money.”3 Also, the Seats2Meet is a diverse organization, every operators realizes different ideas and pilots. There is a strong culture of sharing the successful pilots so the whole organization can benefit from it: “We try to pilot as much as possible to see if there are any changes in the vision of Seats2Meet. If there are, we share it as much as possible. And we try the other location to join this sharing process.”

                                                                                                               2 Based on the interview with Felix Lepoutre, one of the founders of Seats2Meet and the director of Meet Berlage & Workspaces, Seats2Meet Amsterdam, 21/10/2014. Interview transcript is attached as Appendix 2. 3 Ibid.

  13  

Model suggestion The suggested model contains both features of a traditional franchising and a “friendchise” model. The model is centered around the current TSR Board based in the Netherlands. The future international “friendchisees” of TSR are pictured as the 7 future TSR routes. Blue arrows represent traditional hierarchical franchise relations. Red arrows represent friendchise relationship of instant informal sharing of local market knowledge and successful initiatives, constant discussion and evolution of TSR vision based on the observations from all over the world. This constant communication will allow the new franchisees to have two sources of feedback: from the Board and from the peers from the other countries. The new franchisees will be joining gradually, and the more recent participants will be able to learn from the more experienced franchisees.

TSR Board will cover the following functions: formulating and maintaining the initial vision, managing global marketing and raising awareness about TSR, managing global finance, formulating and developing the global educational objectives. It is important to emphasize that in this structure TSR Board is not responsible for organizing trips and recruiting participants. The local recruitment will be done by the franchisees. Depending on the task division in the Board, the Board members and/or volunteers will promote the different TSR routes. But the managerial burden of completing the Silk Road team, or any other travelling team, will be delegated to the franchisee. This solves the problem of availability for the

  14  

current Board members: they will concentrate on the vision and strategic decisions, while the franchisees will do the most of organizational work. Global marketing will be become increasingly important once the TSR website will be offering several routes. Currently, bicycling The Study Road is a one time experience. Once several routes are offered, the participants might be interested in doing parts of the different routes. The global website describing the offered routes will open new opportunities for TSR. Also, the well-managed global website will help the franchisee on one continent promote another TSR route as an exciting traveling destination, in addition to the other benefits of TSR. Introducing and coordinating innovation is an important aspect of the new model for the Board and international franchisees. Once there are 7 franchised routes all over the world, it will be very difficult for the TSR Board alone to manage them all in terms of quality control and feedback. That is why the TSR “friendchising” network will be build as a collaboration based on 360 degrees feedback. Performance of each of the franchisees will be assessed by the Board and the other franchisees. The same mechanism will work for spreading innovations. The Board will be collecting and sharing information about successful pilots, about the changes in demand and the new trends occurring in different regions. In the mean time, the Board should encourage the franchisees to share all their successes and failures, to ask for feedback and provide it. As the example of Seats2Meet shows, the franchisees are eager to ask for feedback and to share their achievements4. Each of the franchisees will fulfill the following functions: evolving and developing the vision, taking care of the local marketing, finance and educational programs, introducing and sharing innovation. To sum up, the “friendchise” model offers great compliance of organizational structure with the vision and strategy of TSR. It is a model to create fruitful cooperation between enthusiastic visionary people. “Friendchise” model solves the problem of control over the franchisee, because every decision in the model is subject to feedback from the Board and from all the other network members. The constant feedback and innovation exchange are also creating the effect of sustainable learning organization that improves itself. The Study Road For Dummies In addition to this report, we have developed The Manual: The Study Road – For Dummies. This document can be used to give to the Franchisees. It is based on the two years of experience which The Study Road has with The Silk Road. After reading the manual, a franchisee will be able to plan and successfully start a new Study Road. The content of the manual is as follows:                                                                                                                4 Based on the interview with Felix Lepoutre, one of the founders of Seats2Meet and the director of Meet Berlage & Workspaces, Seats2Meet Amsterdam, 21/10/2014. Interview transcript is attached as Appendix 2.

  15  

First a Summary and history of The Study Road is given and the history of The Study Road and the founding of the Silk Road is described. The ownership of The Study Road is described; Joya van Hout, Miguel Rodriquez and the interns are mentioned. After the introduction, the missions, goals and keys to success are thoroughly described. This way, the franchisee knows where The Study Road wants to go. Because The Study Road wants to attract more partners and sponsors, the current partners and sponsors are also shortly described. To give a general understanding of what the franchisee will be doing, the responsibilities of the franchisee, The Study Road – the Netherlands and the participants are mentioned. In the last part, ‘How to start your own study road?’, a step by step plan will describe exactly how to start a pilot and a new Study Road. The appendixes contain the preparation form, the contract and the program reader. These documents are all written by Joya van Hout and Miguel Rodriquez. The appendixes still have some parts that need to be changed. For example, we advise The Study Road to translate the terms & conditions to English. 5. Building the friendchise: short- and long-term recommendations

  16  

Based on the internal and external analysis of TSR, theoretical and empirical research, it is advised for TSR to implement several conditions to make their expansion process through “friendchising” model successful. The following table has an overview of the advised steps. Preconditions to franchise: action points

• Communicate the vision • Create incentives for entrepreneurs

Short-term recommendations Long-term recommendations • Redefine the functions of the Board

members • Increase and structure volunteer pool • Consider cooperating with NPO in the

field of leadership development • Hire paid personnel/volunteers to

organize campus recruitment at all major educational institutions in the Netherlands

• Consider hiring full-time stuff to guarantee high participation rate

• Develop the business-oriented strategy: offer cycling trips and leadership development for programs

Firstly, the precondition of “friendchising” are discussed. • Communicate the vision

In this report we are advocating on the “friendchising” model for TSR, and this model is based on a strong vision that unites the participants. We see the vision of the TSR Board as strength of the organization: it is unique, bright and ambitious. In the mean, it needs to be clearly communicated to the future franchisees. TSR franchisees all have a good idea about the organization, and they share the values TSR strives for. But a clear vision will strengthen the relation between the Board and the franchisees, and will make the transition to a strong organization. The vision also serves as a measurement for all decisions made. Establishing a franchise network will raise many questions, and in solving those questions franchisees will always go back to the initial vision. Formulating a vision is a task for the core staff of an organization, for the vicious leaders and founders. We propose a preliminary version of the vision statement of TSR: “To develop a worldwide network of unique cycling & personal development routes, so that in 10 years employers will ask the job applicants why they did not join The Study Road”.

• Creating incentives for entrepreneurs. The franchisees of TSR are joining the project because they are cycling enthusiasts, because they share the values of TSR and because they want to create their own TSR routes. The incentives for a regular franchise project are to create a cash cow (most franchisees copy profitable business models). While there is an opportunity for an entrepreneur to set a sustainable business by franchising TSR, it is not the primary incentive. Thus, the non-

  17  

financial incentives need to be articulated. TSR “friendchise” model is moved by engagement of the participants, and the engagement is based in the will to promote the unique features of TSR. These unique TSR “selling points” are personal development, leadership skills, intercultural competence, travelling experience, personal challenge and team work in extreme circumstances. Short-term recommendations

• Redefine the functions of the Board members The transition to the franchise model will change the tasks of the Board as such. While the organizational tasks will be delegated to the franchisees, the Board can concentrate on strategic tasks such as global marketing, developing the educational program, developing the vision and piloting the new ideas (such as implementing the economy of sharing in TSR). The amount of managerial tasks will be reduced (which was one of the objectives of this report), but the new tasks will appear.

• Increase and structure volunteer pool Hand in hand with restructuring the Board come the changes in volunteer help within TSR. The most important new task is the coordination and communication with the franchisees. The decision needs to be made about the position of coordinator. Once the task description will become clear, a suitable candidate can be chosen form the current volunteer team, or from the new recruits. One of the issues of internal organization of TSR was the overlap in functions of volunteers. Having in mind the list of the new tasks related to the franchising, TSR can create clear volunteer positions.

• Consider cooperating with NPO in the field of leadership development The leadership development is a truly unique selling point of TSR. While leadership development remains to be a relevant topic in the traditional education, TSR offers a real life learning-from-doing experience, backed up with the feedback sessions and trainings. TSR can acquire new strategic alliance among NPO that promote leadership, entrepreneurship, intercultural development and other relevant values. The nature of this cooperation is defined by the Board of TSR and can range from PR support to sponsorship.

• Hire paid personnel/volunteers to organize campus recruitment at all major educational institutions in the Netherlands

TSR is targeted at students and young professionals, and TSR already had some successful experience of cooperation with the Dutch universities. Exploring the opportunity of campus promotion can become a real boost for participation rate of TSR. With the vision that emphasises leadership development and unique educational experience, TSR becomes even more attractive to students. Student associations, honours programs, campus media can also become the strategic alliance of TSR, and addressing them is an interesting and useful task for TSR volunteers.

  18  

Long-term recommendations • Consider hiring full-time stuff to guarantee high participation rate

Hiring full-time personnel is a long-term recommendation, and it can be applied when TSR franchise network will become a sustainable business model.

• Develop the business-oriented strategy: offer cycling trips and leadership development for programs

For business-oriented strategy of TSR, another successful experience of Seats2Meet can be applied: marketing of relations. Next to the regular marketing tools, it is really important to let the potential customers imagine the experience of TSR, to create a situation of developing relations with them. All these recommendations are aimed at strengthening TSR and exploiting its existing opportunities to the most. The short-term recommendations are advised for the period of the coming 1-2 years. Based on our analysis, we advise TSR to discuss these pints and, after necessary changes and addition, use these points as the agenda for development. The longer goals are vaguer and are subject to consideration of TSR, not action points. Finally, all these recommendations are a byproduct of our research on the best expansion strategy for TSR. We will gladly develop these recommendations in our further cooperation. 6. Conslusion

  19  

The Study Road is a very energetic and enthusiastic organization with great people behind it. We believe that our cooperation was fruitful and we achieved all our common goals. The vision of The Study Road is very strong, it gave us inspiration to do this research, and we also found answer for many of our questions in it. This makes us believe that The Study Road is on the right track, and it will make a new quality step into expansion. Hopefully, that step will be based on our findings. The original consultancy request concerned the expansion strategy for TSR: ’Is there a possibility to develop a new business model that enables TSR to expand the current study road program, to other parts of the world and achieve the 7 roads in a way that even a small core organization can run them all?’’ To answer the questions, we have considered several option and chose the franchise model that promised many advantages for TSR. After our interview with the Seats2Meet representative, we combined the traditional franchise model with the “friendchise” model used at Seats2Meet. The model we presented for TSR is sustainable; it satisfies the current needs of the TSR and offer many opportunities for development: this model is flexible, adoptive to changes in the market, and will stimulate innovation. We advised two preconditions of franchising to make the expansion successful: articulate the vision and creative strong incentives for entrepreneurs to join. After completing these preconditions, TSR is ready to build a get international organization working towards the common vision: “To develop a worldwide network of unique cycling & personal development routes, so that in 10 years employers will ask the job applicants why they did not join The Study Road”. Other conditions to franchise are offered for The Study Road to realize all the existing opportunities. Finally, we developed an additional document ‘THE STUDY ROAD for DUMMIES’, a document that provide a step by step plan for friendchisees to set up a new road. The Study Road is an inspirational organization that has already achieved a lot. We hope that our advice will let The Study Road pump their bikes and to start a new exciting trip through the 7 routes all over the world! 7. Literature

  20  

Entrepeneur. (2014). The pros and cons of franchising your business. [http://www.entrepreneur.com/article/226489]. 26 october 2014. FDS. (2014). Reasons for franchising your business. [http://www.fdsfranchise.com/reasons-to-franchise-your-business.htm]. 26 october 2014. Franexcel (2014). Advantages and Disadvantages of Franchising. [http://www.franexcel.com/resources.php?id=24]. 25 october 2014

10. Appendix Slides

  21  

  22