Abstract:
This study explored performance differences between corporate-owned and operated and franchised outlets in the
quick-service restaurant (QSR) industry. While studies have shown that there is a performance difference
favouring franchisees, the reasons for this difference have not been explained. Using the Resource-Based View
of the Firm, the operational differences between two ownership modes within the same franchise ecosystem were
assessed. The study used qualitative data collected from twenty interviews with a broad range of stakeholders
across a single South Africa quick-service restaurant brand that included company-owned and operated stores and
franchised operations. The study identified a range of performance factors: franchisee motivation, franchisee
empowerment and flexibility, manager focus, opportunity realisation, corporate rigidity and tactical restaurant
management that contribute to enhancing the entrepreneurial resources and orientation that, along with strategic
flexibility, provide franchisees with a performance advantage. This study has implications for those in the QSR
sector and the hospitality industry in general, detailing what drives or hinders firm performance. This research has
value for theoreticians in its novel application of the Resource-Based View of the Firm theory to a franchise-based
entrepreneurial environment.
