Abstract
The current high unemployment rate and the need to develop the SME sector in South Africa, has highlighted the franchise sector as a possible generator of employment and wealth. Certain problems in the SME sector, for example the lack of financing, were identified and investigated from the viewpoint of the franchisor. This study attempts to analyse the general problems that prospective franchisees are confronted with and then focuses on the more specific problems regarding financing as experienced by the prospective franchisees.
Highlights
AND MOTIVATION FOR THE RESEARCHThe development of the small business sector is one of the critical areas in the economy of South Africa
This study investigates and analyses financing constraints experienced by a prospective franchisee in view of the above-mentioned aspects
The first part of the questionnaire deals with the general problems experienced by the small business sector
Summary
The development of the small business sector is one of the critical areas in the economy of South Africa. The small business sector plays an important part in the economic and social development of the country and can contribute substantially to job creation. A lively small business sector is regarded as a prerequisite for fast growth and economic development in South Africa (Thomas, 1995: 13). The development of the small business sector is regarded as a mechanism allowing formerly disadvantaged groups access to economic opportunities. One of the most important aspects, which is directly relevant for this survey, is the accessibility of financing for the small business sector. The general feeling of entrepreneurs and other institutions supporting the small business sector is that access to financing at affordable interest rates is one of the deciding factors for the success of the small business enterprise (Thomas, 1995: 21)
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