Entrepreneurial resources as a driver of performance differences in a quick service restaurant franchise system

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.