Abstract
Orientation: Franchising is a popular and multifaceted business arrangement that captures a sizeable portion of the restaurant industry worldwide. Research purpose: The study empirically investigated the influence of various site location and branding factors on the growth of franchised fast food restaurant brands across the greater Gauteng region. Motivation of the study: Researching which factors influence the growth of franchised fast food restaurant brands is important for an emerging market context such as South Africa when considering the marked increase in the consumption of fast foods. Design: A sample of 140 customers was surveyed from 12 leading franchised fast food outlets. Primary data were collected for various items representing site location and brand factors. Regression analysis was used to test the hypotheses. Findings: The overall findings showed that convenience and central facilities of a retail location are positively and significantly associated with the growth of the franchise fast food outlet. Practical implications: The study findings have implications for practitioners who need to take into account which factors influence revenue growth, since targeted interventions may be required to implement sustainable strategies by franchisors. Contribution: The findings may serve as a catalyst for this growing and important activity in South Africa and other emerging markets.
Highlights
Franchising is a popular and multifaceted business arrangement that has attracted considerable research attention (Combs, Michael & Castrogiovanni 2004; Michael & Combs 2008:74)
Despite the importance of franchising to the South African economy and the restaurant industry, little research has been conducted at a store level across franchised fast food restaurant brands
Regression analysis was employed to test the hypotheses, which entailed using stepwise linear regression where initially the variables contributing the most to explaining any variance in the dependent variable (DV) were entered, with subsequent variables included based on their incremental contribution over the first variable and based on the criterion that they were statistically significant. Based on this procedure the results show that the only factors that had a significant impact on the DV revenue growth were convenience and central facilities; see Table 2a-b
Summary
Franchising is a popular and multifaceted business arrangement that has attracted considerable research attention (Combs, Michael & Castrogiovanni 2004; Michael & Combs 2008:74). Franchising is one of the key forms of global expansion and entrance into foreign markets for international businesses, with millions of franchisees worldwide (Hsu, Jang & Canter 2010:441; Shaw 2009:33). Despite the importance of franchising to the South African economy and the restaurant industry, little research has been conducted at a store level across franchised fast food restaurant brands. This is a serious oversight as franchising captures a sizeable portion of the restaurant industry worldwide and plays an important role in its growth (Hsu et al 2010). Researching franchised fast food restaurant brands is important for an emerging market context such as South Africa, when considering the marked increase in the consumption of affordable, large-portioned and immediate fast foods (Terblanche & Boshoff 2010:2; Van Zyl, Steyn & Marais 2010:125)
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