FACTORS INFLUENCING FRANCHISEES’ BUSINESS PERFORMANCE A STUDY ON TANZANIA FRANCHISE SYSTEM FACTORS INFLUENCING FRANCHISEES’ BUSINESS PERFORMANCE A STUDY ON TANZANIA FRANCHISE SYSTEM By Benjamin Mungo A Dissertation Submitted in Partial Fulfilment of the Requirements for the award of the Degree of Master of Business Administration in Corporate Management (MBA_CM) of Mzumbe University 2019 CERTIFICATION We, the undersigned, certify that we have read and hereby recommend for acceptance by the Mzumbe University, a Dissertation entitled. “Factors Influencing Franchisees’ Business Performance A Study on Tanzania Franchise System” in partial fulfilment of the requirements for the award of Degree of Master of Business Administration in Corporate Management (MBA_CM) of Mzumbe University. Signature __________________________ Major Supervisor Signature ______________________________ Internal Examiner Signature _______________________________ External Supervisor Accepted for the Board of Mbeya Campus College i DECLARATION AND COPY RIGHT I Benjamin Mungo, do hereby declare that this dissertation is my own original work and that it has not and will not be presented to any other institution for the award of the said qualification or any other similar award. Signature ____________________________ Date _____________________________ This dissertation is a copy right material under the Berne Convention, the copy of Act of 1999 and other international and national enactments, in that behalf on the intellectual property. It may not be reproduced by any means in full or parts except for shot extract in fair dealings for research or private study, critical scholarly review or disclosure with an acknowledgement with the written permission of directorate of post graduate studies on behalf of both the author and the Mzumbe University. ©2019 ii ACKNOWLEDGEMENT This work is the end product of the contribution of several individuals. The dissertation could not have been completed without support of many people. First of all, I thank my God for enabling me throughout the process to achieve this stage. Secondly my special thanks also go to my supervisor Dr Hellen Mushi, for his total devotion, counselling, guidance, and patience and sacrifice genuine critics to make this work reach its current status. She played a great role from the period I was preparing a research proposal, and used much of his time assisting me to ensure that the presented report was in required shape. He devoted much in her precious time to deeply read my drafts and recommend for several improvements. Thirdly, I would like to convey my sincere thanks to Mbeya city urban authority for releasing me to carry out this study. Fourthly, I am deeply indebted to my lovely wife Consolatha Festo and my children Angelina and Isaac for the endurance and perseverance to stay without the love of her wife while pursuing my master degree. Finally, I would like to stress that, the entire above are no way associated with any errors that may be found in this work, all the shortcomings of this study are entirely the author’s responsibility. iii DEDICATION This dissertation report is dedicated to my late aunt Saada Saleh for her support during my secondary school studies and my Parents Mr Valentine Mungo and Maria Masunga wherever they are. iv ABSTRACT This study explores factors that influence franchisees’ business performance in Tanzania. Using a model of factors influencing franchise system performance as a conceptual framework, an extensive review and synthesis of literature was done. The literature synthesis led to the development of four research issues and a preliminary theoretical framework for the research. The issues and the framework were subjected to empirical exploration using data collected through in-depth interviews. The research was conducted in two stages: preliminary stage and main stage. A total of thirty-two purposively selected franchisees participated in the study; six in the preliminary stage and twenty-six in the main stage. Data were managed and analysed using NVivo version 11. Through the analysis, a total of twenty-one factors were confirmed as having influence on franchisees business performance in Tanzania. Fourteen of these factors are as identified in the preliminary theoretical framework while seven were newly found in the study. This study has found that four business factors namely brand name, supports, control and supervision are the most important factors influencing franchisees’ business performance in Tanzania. Based on the findings of this study, it is therefore recommended that facilities and supports are important factors for franchisee’s business performance thus franchisors should support franchisees in terms of facilities and business management knowledge, franchisors should take measures to ensure that franchisees comply with system standards and practices, franchisors should have a clear understanding of their brand names position in the market and ensure that they meet the market demand. Finally, being the first comprehensive attempt to study the practice of franchising in Tanzania, this study makes contributions to franchising literature in three important ways, namely; it reaffirms current understanding, identifies new insights and enhances contextual knowledge of the business model. v LIST OF ABBREVIATIONS APCFE Asia-Pacific Centre for Franchising Excellence BFA British Franchise Association BFA Brazilian Franchising Association BRICS Brazil, Russia, India, China and South Africa CAQDA Computer-Assisted Qualitative Data Analysis Software CEOs Chief Executive Officers EAGLES Emerging and Growth-Led Economies ECT Expectation Confirmation Theory EFF European Franchise Federation EO Entrepreneurial Orientation FASA Franchising Association of South Africa FCA Franchise Council of Australian GDP Gross Domestic Product HIIT Hands-on Institute of Information Technology Ibid in the same source ICT Information and Communication Technologies IFA International Franchise Association IFC International Finance Corporation IT Information Technology KFC Kentucky Fried Chicken MATRADE Malaysia External Trade Development Corporation MDTCC Ministry of Domestic Trade, Cooperative and Consumerism MFA Malaysia Franchise Association MINT Mexico, Indonesia, Tanzania and Turkey MX Mixed NGOs Non-Governmental Organizations NIFA Tanzanian International Franchise Association NOTAP National Office for Technology Acquisition and Promotion NUD*IST Non-numerical Unstructured Data, providing ways of managing ideas by Indexing, Searching and Theorizing) vi OP Organizational Performance PhD Doctor of Philosophy QL Qualitative QN Quantitative R &D Research and Development RBT Resource-Based Theory RBV Resource-Based View RELQUAL Relationship Quality SMEs Small and Medium Enterprises UAC United African Company UFOC Uniform Franchise Offering Circular UNCTAD United Nations Conference on Trade and Development WFA World Franchise Associate vii TABLE OF CONTENTS CERTIFICATION ........................................................................................................ i DECLARATION ......................................................................................................... ii COPY RIGHT ............................................................................................................. ii ACKNOWLEDGEMENT ..........................................................................................iii DEDICATION ........................................................................................................... iv ABSTRACT ................................................................................................................ v LIST OF ABBREVIATIONS .................................................................................... vi LIST OF TABLES .................................................................................................... xii LIST OF FIGURES .................................................................................................. xiv CHAPTER ONE ........................................................................................................ 1 INTRODUCTION ..................................................................................................... 1 1.0 Introduction ........................................................................................................... 1 1.1 Background of the Study ....................................................................................... 1 1.2 Statement of the Problem ...................................................................................... 2 1.2.1 Recent Downturn in the Performance of Franchise Firms Across the World .... 3 1.2.2 Lack of Clear Understanding of Level and Factors that Drive Franchise Firm Performance ............................................................................................................... 7 1.2.3 General Paucity and Partiality of Extant Franchise Research ............................ 8 1.3 Research Issues .................................................................................................... 10 1.4 Objective of the Study ......................................................................................... 10 1.5 Significance of the Study ..................................................................................... 10 1.6 Scope and Delimitation of the Study ................................................................... 14 1.7 Organization of the Study ...................................................................................