Survival in Rural Franchise: A Study of Information Kiosks in India

Abstract

Franchising as a means to deliver ‘public services’ in rural areas has gained significant policy attention in recent years. This paper explores the factors that influence franchisee survival, based on a sample of 150 ‘information kiosks’, observed over two years in rural South India. ‘Information kiosks’ refer to firms that provide IT-based services to the local village and town populations. The determinants of survival considered include the characteristics of the entrepreneur, important business decisions, and aspects of the local context, such as market competition and government involvement. The study finds that franchisees who own another business, and those who use the assistance of family in the kiosk business, have better chances of survival. Competition matters, with ‘optimal distances’ between firms leading to better survival outcomes. There is evidence to suggest that entrepreneurs who enter the business based on information acquired from local government sources are less likely to survive. The study also finds weak evidence that kiosks located in government offices have shorter life-spans.

Keywords: Micro Enterprise, Franchisee Survival, Information Kiosks, Rural Services, Local Institutional Context, India