A model for enhancing franchisee effectiveness in the fast food industry

Abstract

Franchising has become a popular strategy for firms pursuing internationalization. Owing to this, several businesses globally, are partnering with established brands in sectors such as manufacturing and retailing. In South Africa, the fast-food industry is experiencing exponential growth in the franchise business. For this reason, this study examined the effectiveness of franchisees in the fast-food industry in the City of Tshwane. While prior studies have examined success factors in South Africa’s fast food franchise industry in general, there remains scant literature on the specific determinants of franchisee effectiveness in the city of Tshwane. Furthermore, despite the rapid expansion of the fast food franchise sector in Tshwane, franchisee closures remain alarmingly high with almost 10% failing in the early business stages. As a result, a study of this nature has become paramount. An understanding of the factors that influence franchisee effectiveness has become necessary to facilitate decision-making priorities in this sector.  Following an interpretivism paradigm, the study uses a qualitative methodology. A descriptive research design with structured interviews was selected to gather in-depth data from participants, enabling a comprehensive understanding of franchisee effectiveness. The research population includes 140 fast food franchise outlets in Tshwane, with a purposive non-probability sampling method used to select a sample of 10 participants. Each participant has been interviewed using a semi structured interview guide and digitally transcribed. Data analysis is conducted using thematic analysis. The findings revealed that operational efficiency, strong franchisor support and customer service are key drivers of franchisee success in Tshwane’s fast-food industry. Successful franchises excel in financial oversight, staff training and strategic marketing while financial constraints, high operational costs and poor cash flow management contribute to failures. Additionally, location and market accessibility play a crucial role in franchise sustainability.  The primary contribution is the development of a Franchisee Effectiveness Model which offers a structured framework to enhance franchisee performance. The model will provide actionable insight for franchisors, franchisees and policymakers, guiding targeted interventions such as enhanced and targeted training programs and strengthening franchisor-franchisee collaboration and market specific strategies to reduce failure rates and ensure long term sustainability.