IDEAS home Printed from https://ideas.repec.org/a/gam/jadmsc/v13y2022i1p8-d1017666.html
   My bibliography  Save this article

Critical Success Factors of Franchising Firms: A Study on Franchisors and Franchisees

Author

Listed:
  • Mohd Hizam-Hanafiah

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Mohd Faizal Abdul Ghani

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Rosmah Mat Isa

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Hamizah Abd Hamid

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

Abstract

The franchising sector demands a high level of assurance and commitment. This is because creating entrepreneurial value is at the core of any franchising strategy. However, little is understood about what causes franchised businesses’ critical success factors, particularly in developing nations like Malaysia. Hence, this study aims to identify the critical success factors in franchising business firms. The characteristics of franchisors and franchisees that can contribute to the franchise system’s success in Malaysia were discovered using a focus group method by inviting franchisors and franchisees who are already running their businesses. In addition, Perbadanan Nasional Berhad (PERNAS) and the Malaysian Franchise Association (MFA), together with academicians, were also invited as a part of the focus group discussion. The findings show that three critical success factors emerged from this study, the franchisor’s capability, interconnection with franchisees, and constant innovation. These three elements demonstrated that there is still room for a more significant expansion. Therefore, anyone considering joining a franchise should know it is an option. Additionally, this research helps produce a valuable model of the franchising business process that regulators, franchisors, and franchisees can use as a guide. Finally, this study also offers directions for further research.

Suggested Citation

  • Mohd Hizam-Hanafiah & Mohd Faizal Abdul Ghani & Rosmah Mat Isa & Hamizah Abd Hamid, 2022. "Critical Success Factors of Franchising Firms: A Study on Franchisors and Franchisees," Administrative Sciences, MDPI, vol. 13(1), pages 1-16, December.
    • Handle: RePEc:gam:jadmsc:v:13:y:2022:i:1:p:8-:d:1017666
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2076-3387/13/1/8/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2076-3387/13/1/8/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Macpherson, Allan & Holt, Robin, 2007. "Knowledge, learning and small firm growth: A systematic review of the evidence," Research Policy, Elsevier, vol. 36(2), pages 172-192, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Myint Moe Chit, 2018. "Political openness and the growth of small and medium enterprises: empirical evidence from transition economies," Empirical Economics, Springer, vol. 55(2), pages 781-804, September.
    2. O’Keeffe, Juliette M. & Gilmour, Daniel & Simpson, Edward, 2016. "A network approach to overcoming barriers to market engagement for SMEs in energy efficiency initiatives such as the Green Deal," Energy Policy, Elsevier, vol. 97(C), pages 582-590.
    3. Chengguang Li & Rodrigo Isidor & Luis Alfonso Dau & Rudy Kabst, 2018. "The More the Merrier? Immigrant Share and Entrepreneurial Activities," Entrepreneurship Theory and Practice, , vol. 42(5), pages 698-733, September.
    4. Maria Tunberg & Alistair R. Anderson, 2020. "Growing a small firm; experiences and managing difficult processes," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1445-1463, December.
    5. Xiaoli Zhao & Pavel Castka & Cory Searcy, 2020. "ISO Standards: A Platform for Achieving Sustainable Development Goal 2," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    6. Demirbag, Mehmet & McGuinness, Martina & Akin, Ahmet & Bayyurt, Nizamettin & Basti, Eyup, 2016. "The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market," International Business Review, Elsevier, vol. 25(5), pages 1089-1102.
    7. Mayer-Haug, Katrin & Read, Stuart & Brinckmann, Jan & Dew, Nicholas & Grichnik, Dietmar, 2013. "Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs," Research Policy, Elsevier, vol. 42(6), pages 1251-1273.
    8. Besnik A. Krasniqi & Muhamet Mustafa, 2016. "Small firm growth in a post-conflict environment: the role of human capital, institutional quality, and managerial capacities," International Entrepreneurship and Management Journal, Springer, vol. 12(4), pages 1165-1207, December.
    9. Bamiatzi, Vassiliki & Cavusgil, Salih Tamer & Jabbour, Liza & Sinkovics, Rudolf R., 2014. "Does business group affiliation help firms achieve superior performance during industrial downturns? An empirical examination," International Business Review, Elsevier, vol. 23(1), pages 195-211.
    10. Alkhoraif, Abdullah & Rashid, Hamad & McLaughlin, Patrick, 2019. "Lean implementation in small and medium enterprises: Literature review," Operations Research Perspectives, Elsevier, vol. 6(C).
    11. Khorshed Alam & Mohammad Afshar Ali & Michael Erdiaw-Kwasie & Md Shahiduzzaman & Eswaran Velayutham & Peter A. Murray & Retha Wiesner, 2022. "Impact of ICTs on Innovation and Performance of Firms: Do Start-ups, Regional Proximity and Skills Matter?," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    12. André van Stel & Lorraine Uhlaner & Haibo Zhou & Valerie Duplat, 2012. "Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth," Scales Research Reports H201211, EIM Business and Policy Research.
    13. Leonidou, Erasmia & Christofi, Michael & Vrontis, Demetris & Thrassou, Alkis, 2020. "An integrative framework of stakeholder engagement for innovation management and entrepreneurship development," Journal of Business Research, Elsevier, vol. 119(C), pages 245-258.
    14. Viktorija Petrov & Đorđe Ćelić & Zorica Uzelac & Zoran Drašković, 2020. "Three pillars of knowledge management in SMEs: evidence from Serbia," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 417-438, June.
    15. Soluk, Jonas & Decker-Lange, Carolin & Hack, Andreas, 2023. "Small steps for the big hit: A dynamic capabilities perspective on business networks and non-disruptive digital technologies in SMEs," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    16. Surbhi Gupta & Anil Kumar Sharma, 2022. "Evolution of infrastructure as an asset class: a systematic literature review and thematic analysis," Journal of Asset Management, Palgrave Macmillan, vol. 23(3), pages 173-200, May.
    17. Aaron H. Anglin & Aaron F. McKenny & Jeremy C. Short, 2018. "The Impact of Collective Optimism on New Venture Creation and Growth: A Social Contagion Perspective," Entrepreneurship Theory and Practice, , vol. 42(3), pages 390-425, May.
    18. Yannis Caloghirou & Ioannis Giotopoulos & Alexandra Kontolaimou & Aggelos Tsakanikas, 2022. "Inside the black box of high-growth firms in a crisis-hit economy: corporate strategy, employee human capital and R&D capabilities," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1319-1345, September.
    19. Dohse, Dirk & Ott, Ingrid, 2014. "Heterogenous skills, growth and convergence," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 52-67.
    20. Agnihotri, Arpita & Bhattacharya, Saurabh, 2015. "Determinants of export intensity in emerging markets: An upper echelon perspective," Journal of World Business, Elsevier, vol. 50(4), pages 687-695.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jadmsc:v:13:y:2022:i:1:p:8-:d:1017666. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.