Franchisees` level of satisfaction with the franchise contract

van Wyk Gerhard and de Jager Johan
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van Wyk Gerhard: Faculty of Management Sciences, Tshwane University of Technology, South Africa, Private Bag 680 Pretoria 0001 Republic of South Africa
de Jager Johan: Faculty of Management Sciences, Tshwane University of Technology, South Africa, Private Bag 680 Pretoria 0001 Republic of South Africa

E3 Journal of Business Management and Economics., 2010, vol. 1, issue 1, 010-017

Abstract: Franchisees` often complain that franchisors do not meet their needs, and are generally viewed as being unhappy with their franchise agreements. The aim of the paper is to investigate the level of satisfaction of franchisees with regard to the elements of individual franchise concepts, managed by the franchise agreement. Including details of the standard franchise agreement: terms of the contract, rights and obligations, training programs, operational support provided by the franchisor, products, pricing, promotions, distribution, and franchise fees. Data was collected by means of a self-administrated questionnaire that was sent to the selected population. The data represents two groups of the same franchise, namely franchisees operating two years and less as franchisees and franchisees that operate longer than two years as franchisees and consider the extent to which selected contract elements are viewed differently. Findings indicate that both groups of franchisees had a high level of satisfaction with the elements of the franchise contract with the exception of identified opportunities that could be developed in order to increase the franchisees level of satisfaction with the franchise agreement. In general, the franchisor also had a high level of marketing orientation. Further research is needed to ensure that the franchisor’s current product ranges will be more competitive if compared with other franchise concepts. The franchisor should attend to the improvement of product research, new product development, pricing strategies, packaging and product planning. Key words: Franchisee satisfaction, marketing-orientation, franchisee and franchisor, franchise agreement, franchise legislation.

Date: 2010-10
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