A Study of Fast-Food Franchising as a Popular Business Model in the South African Dining Landscape
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The IIE
Abstract
The franchise business model is popular among businesses operating in the South African dining landscape. Franchise fast-food outlets have grown in numbers and potential exists for these numbers to grow further. Both local and international businesses haven chosen to use the franchise model in the operations of their businesses in the South African dining landscape. Various factors contribute to the popularity of the franchise model.
This research report explores the various factors which promote franchising as a popular business model. Challenges to the franchise model are identified and discussed. The nature of the relationship between franchisee and franchisor is explored. Using Agency Theory (Brickley, Dark and Weisbach, 1991), this research study identifies and explores the factors which promote franchising as a popular business model, whilst attempting to understand the relationship between franchisee and franchisor.
From an interpretivist paradigm, the study follows the phenomenological research tradition. This was used in order to understand the reasons contributing to the popularity of the franchise model in the fast-food industry as a phenomenon. The data collection method used was semi-structured interviews. The data analysis method was thematic analysis as well as using inductive reasoning to explore the research questions.
The findings of the study showed the reasons why business owners chose to own a franchise business. The reasons were the existing business model which accompanies a franchise business and the effective support services provided by the franchisor. These have been identified as the factors promoting the attractiveness of the franchise model. Conflict between franchisee and franchisor, and business challenges facing franchise businesses are challenges to the franchise model. The franchisee-franchisor relationship has been identified as not being mutually-beneficial to a large extent to a large extent.