Abstract
Franchising plays a significant role in the South African economy. It contributed an estimated 13.3 per cent to the GDP in 2016. Despite the importance of franchising to the South African economy and the restaurant industry, little research has been done at store level, and such further research is required considering the ever-changing business environment which presents new challenges and opportunities. Literature suggests that entrepreneurs choose franchising as a way of owning a business due to perceived benefits such as training and support, which are provided by the franchisor. This study investigates how franchisor support may optimise franchisee performance in the restaurant industry. Qualitative enquiry was conducted using News Café franchise as a case study. Data was collected through semi-structured face-to-face interviews with franchisees and franchisor personnel, followed by thematic data analysis using Atlas ti. Version 8.0. The results indicate that participants perceive that profitability, growth of business and doing well in franchisor assessments are indicators of good franchisee performance. Participants were largely satisfied with the support they obtained at the beginning of their franchise relationship, expressing satisfaction with the daily operational support, which include the kitchen, bar and front of house. The study found that franchisees face serious challenges, some of which are attributed to the local environment where the stores operate. These include competition, rising costs of doing business, and marketing which sometimes leads to cash-flow constraints. It is recommended that the franchisor finds means of monitoring franchisee financial performance, conduct more market research and pay attention to the local operations environments wherein each franchisee store operates to understand their unique challenges and attend to them promptly. The study proposes strategies that franchisors may implement to optimise franchisee performance as a practical contribution and theoretically it adds to the existing body of knowledge of research done in the franchising sector in South Africa. Further expansive research on how franchisor support impacts franchisee performance and survival in the restaurant sector in South Africa is recommended.
M.Com. (Tourism and Hospitality)