Franchising and the Potential for Economic Development in Africa

Abstract

ABSTRACT This paper examines the contribution of franchising to economic development in Africa. It is based on a recent questionnaire/interview survey of 52 franchising systems (franchisors and franchisees) in South Africa, Egypt, Morocco, and Côte d'lvoire done for the African Development Bank. The paper explores the role of franchising in the promotion of entrepreneurship, employment creation, transfer of technologies and know-how, innovation, the generation of foreign exchange earnings, poverty alleviation, and the enhancement of saving. Franchising is defined here as business format franchising (excluding thereby pure trademark franchising, in which the rights to a company identity would not be accompanied by the product itself; the processes, specific business know-how, training, etc.). The study concludes that franchised business has experienced very strong growth, especially in South Africa, and that it contributes significantly to technology transfers, employment creation, and poverty alleviation.