An evaluation of franchising as a retailling strategy: A case study of first street Spar (2008-2012)

Abstract

The general conclusion from literature on franchising is that franchising results in increased organisational performance by enabling firms to have instant commercial identification, marketing assistance, a proven operating system, on-going management support and professional training. However, this literature has been confined to other parts of the world; hence the aim of this research was to attempt to fill the research gap by investigating the impact of franchising on the performance of a Zimbabwean retail outlet. The research information and its application were aimed at benefiting the corporate world, the country and academic community. This research was based on a single case study design of First Street SPAR (FSS).

Empirical data was obtained through face-to-face interviews with senior managers at the strategic and operational levels of the organization.Unstructured questions were used for gathering in-depth information from the respondents. The respondents were the Managing Director, Branch Manager and Finance Manager. A qualitative research philosophy was used and the data gathered was analyzed through Data Displays in the form of content analytic summary tables.

The study found that franchising had limited impact on the organizational performance of FSS. The organization failed to enjoy all the benefits of franchising because of weak management support from the franchisor as evidenced by infrequent visits by retail specialists to the retail outlet and the ineffective promotional campaigns. It was also established that FSS was not motivated to adhere to the dictates of the franchise because this was not adding value and solving the problems bedeviling the retail outlet.

In view of these findings this study recommends that FSS should demand the right promotional product and prepare a monthly store visit schedule for the franchisor’s retail specialists to ensure regular team visits. It is further recommended that FSS should request the franchisor to reduce the royalty rate from 1% of turnover if it continues to fail to get the necessary support from the franchisor, FSS should consider the termination of the franchise and operate as an independent store or join a successful franchise.