Assessment of franchisees through the entrepreneurial process

Abstract

PURPOSE OF THE STUDY : Since few studies had been conducted in the South African context on whether franchisees progress through an entrepreneurial process this study sought to fill the gap by assessing South African franchisees in the context of an entrepreneurial process and investigating the progress of South African franchisees through an entrepreneurial process. DESIGN/METHODOLOGY/APPROACH : Primary surveyed-quantitative data were collected using self-administered, structured questionnaires with six factors: personal, internal environmental, external environmental, innovation, triggering and implementation factors. Purposive sampling was employed for a sample of 711. Statistical Package for Social Sciences was used for exploratory factor analysis and scale reliability, while Stata 14 performed confirmatory factor analysis and estimated the structural equation model (SEM). FINDINGS : Construct validity and scale reliability conditions were satisfied. SEM estimates showed that implementation factors, and external environmental factors, have a positive and statistically significant influence on franchise business growth. Furthermore, internal environmental factors have a positive and statistically significant influence on the innovation of a franchise business. RECOMMENDATIONS/VALUE : Before pursuing a franchisee business, franchisees should assess the industry and market conditions, expression of interest by financial institutions, the availability of legal assistance, and the availability of key success factors that drive the franchise business growth. Furthermore, franchisees should ensure that conditions, innovation prospects, established structures and diversified products are provided to stimulate the franchise's growth.