Tydskrif vir Geesteswetenskappe
On-line version ISSN 2224-7912
Print version ISSN 0041-4751
VAN WYK, Gerhard and DE JAGER, Johan. Franchisees' level of satisfaction with the opportunities and threats of franchising. Tydskr. geesteswet. [online]. 2010, vol.50, n.3, pp.328-345. ISSN 2224-7912.
Franchisees often complain that franchisors do not meet their needs in general, supported by a belief that franchisees are dissatisfied with the opportunities and constraints of franchises. The objective of this article is to investigate franchisees' level of satisfaction with the opportunities and constraints of franchises, including the following franchise elements: training provided by the franchisor, the use of an established trade name, franchising as a complete business system (product), the allocation of specific geographical areas, and local and national advertising campaigns. Data were collected by means of a self-administrated questionnaire that was sent to the selected population. A census survey was conducted in association with 75 (51%) of the 145 franchisees whose postal addresses are available on the internet. Respondents were requested to arrange their level of agreement in relation to pre-stated variables on a 5-point Likert scale (ranging from "strongly disagree" to "strongly agree"). Of the 145 questionnaires that were posted to franchisees, 77 (53%) were received back. Of these 75 (51,7%) could be used while two (1,3%) were rejected because they were incomplete. The SPSS (15) statistical package was used for the processing of raw tabulated data as part of the statistical analysis process. A Cronbach-alpha coefficient of 0,785 was obtained. This indicates an expectable level of internal consistency and the reliability of the measurement instrument that was used in this study. The data represent two groups of the same franchise, namely franchisees who have functioned as franchisees for two years and less and franchisees who have functioned as franchisees for two years and longer. Consideration is given to the degree to which the two groups observe the franchise elements differently. The population of franchisees that have been franchise holders for between nil and two years as franchisees is slightly smaller than that of the franchisees who have been franchise holders for two years and longer. Franchisees are satisfied with: the margins on products as provided by franchisors, the franchisors' current promotional activities, the support received from the franchisor in the selection process of a distribution point, fi nancial support provided by the franchisor, product and market information as provided by the franchisor, the rate of development of new products by the franchisor and the financial potential of the geographical areas allocated to their franchises. The franchisor understands the training needs of franchisees. The franchisor provides operational support by means of an operational manual. Franchisees do not operate 100% in accordance to the processes as prescribed in the franchisor's operational manual. All distribution points of the franchisor meet the same standard with regard to design and layout. The franchisor does meet the franchisees' needs with regard to products and services provided by the franchisor, including the quality of products that are available in the current product range. Franchisees join the franchise because of the brand name of the franchise and the professional services offered by the franchisor. Franchisees are satisfied with the current franchise fees. The current franchisor product range does not compare favourably with competitors' products with regard to product research, new product development, pricing strategies, packaging and product planning. The perception exists that the current franchise agreement is in favour of the franchisor only. This paper offers a new perspective on the generalisation that franchisees are not satisfied with the opportunities and constraints of franchises. The findings indicate a high level of satisfaction among franchisees with the opportunities and constraints of franchises, with the exception of identified challenges that could be developed further in order to increase franchisees' level of satisfaction - contrary to popular belief.
Keywords : Franchisee satisfaction; franchisees and franchisors; franchise relationship; training; geographical areas; opportunities and constraints.