Franchising in African markets: Motivations and challenges from a Sub‐Saharan African country perspective

• Published date: 01 March 2019
• Author: Adelaide N. A. Kastner,Samuel C. K. Buame,Antoinette Y. B. Gabrah,Mahmoud A. Mahmoud
• DOI: http://doi.org/10.1002/tie.21987
• Date: 01 March 2019

AREA PERSPECTIVES: AFRICA

Franchising in African markets: Motivations and challenges

from a Sub-Saharan African country perspective

Adelaide N. A. Kastner

1,2

| Mahmoud A. Mahmoud

1

| Samuel C. K. Buame

†

|

Antoinette Y. B. Gabrah

1

1

Department of Marketing and

Entrepreneurship, University of Ghana

Business School, University of Ghana, Legon,

Ghana

2

Central Business School, Central University,

Accra, Ghana

Correspondence

Dr. Mahmoud A. Mahmoud, Department of

Marketing and Entrepreneurship, University of

Ghana Business School, University of Ghana,

Legon, Ghana.

Email: mamahmoud@ug.edu.gh

The purpose of this article is to explore and understand the motivations and challenges of fran-

chising in an Africaneconomy. While interest in franchising is increasingin African markets, there

is a paucity of research on franchising from the perspective of local African firms participating in

these international relationships. The motivationsand challenges of franchising fromthe perspec-

tive of African businesses have not been largelyinvestigated so far. Using in-depthinterviews, we

allow motivations and challengesat play to emerge. Convenientand snowball sampling techniques

were used for choosing the unit of analysis, which resulted in four respondent firms. A thematic

approach was adopted for analyzing the data from the field. Support services, brand name, and

franchisor's experience are identified to be the motivations for franchising. Financial assistance

from the franchisor, demand, and competition also play a keyrole in an African firm's decision to

franchise. Legal constraints and infrastructure constraints were the key challenges faced by fran-

chisees in Ghana. The findings of this study may hold for franchisees in other African markets.

However, contextual differencesmay be considered in the application of these findings.

KEYWORDS

African markets, franchising, internationalization, motivations and challenges

1|INTRODUCTION

Scholars in international business have researched on several aspects

of franchising covering cobranding, governance, modes of entry, gen-

der, licensing, franchisee failures, risk, retailing in franchising, relation-

ships in franchising, advertising effects, and many others (Baena,

2012; Canabal & White, 2008; Dalberg, 2009; Y. K. Lee, Kim, Seo, &

Hight, 2015; Nijmeijer, Fabbricotti, & Huijsman, 2014; Petersen &

Welch, 2000; Teegen, 2000). Although such studies have made valu-

able contributions to the international business literature, relatively

few of them focus specifically on the motivations and challenges of

expansion through franchising. Of the aforementioned studies, Tee-

gen (2000) examines the strategic and economic development implica-

tions of globalizing through franchising and acknowledges the

benefits of international franchising but further highlights the need

for more studies to focus on the motives of the franchisee in cross-

border contracts. Baena (2012) in a similar study conducted on fran-

chising in African markets, also reaffirms that the motivations and

forms of franchising are key issues in international business that need

to be focused on in future research.

Furthermore, Petersen and Welch (2000) and Canabal and White

(2008) have established that there has been a shift from other modes

of entry into franchising. Yet, there is relatively little knowledge about

the motives for which firms are doing so. They, therefore, proposed

there should be further research that concentrates on the reasons for

franchising to broaden the scope of knowledge in the area. Nijmeijer

et al. (2014), Combs, Ketchen, and Short (2011), and Altinay (2006) in

reviewing the literature on franchising, indicated that issues such as

the motivations for franchising and types of franchising have been

underresearched in current times. Therefore, they advocated that

studies must focus on addressing this gap within the franchising litera-

ture, which this study seeks to address.

In recent times, the global business environment has seen several

franchising developments, and research indicates the triad nations

†

We dedicate this work to the memory of the Late Dr. S. C. K. Buame who

passed on before the final publication.

DOI: 10.1002/tie.21987

Thunderbird Int. Bus. Rev. 2019;61:169–181. wileyonlinelibrary.com/journal/tie © 2018 Wiley Periodicals, Inc. 169