Franchising in Emerging Markets: Motivations and Challenges From a Ghanaian Perspective

Abstract

The purpose of this study to investigate, explore and understand the motivations of franchising and some of the challenges, franchisees are likely to face in emerging markets like Ghana. The study employed qualitative approach specifically, a case study research strategy is used to investigate the problem. Purposive and Snowball sampling techniques are used for choosing the unit of analysis which resulted in 4 firms (4 managers). Also, data was collected through an in-depth interview. The findings of the study revealed that support services, brand name, franchisor’s experience, financial assistance from the franchisor and, demand and competition plays a key role in a franchisee’s decision to franchise. Also, the study found that there are three main challenges faced by franchisees in Ghana, namely: legal constraints, infrastructure constraints and economic decline. However, franchises in Ghana have other peculiar motivations and challenges which are not cited in previous research. The study is limited in terms of the geographical area. Thus, it focuses solely on franchise firms in Accra. The findings of the study are more likely to hold for other franchisees in all emerging market context. However, the applicability of these findings to other context needs further investigations. Franchising is a key business strategy in today’s competitive business environment, therefore, it is of great importance that investors understand these motivators and challenges in order to make the right choice. The present study also produces useful findings, which can be used by investors, policy makers and researchers as guidelines for future investment decisions.