Philippine E-Journals

Factors Affecting the Sustainability of a Franchise System

Mark Vincent B Bendo

 

Abstract:

This study investigated the sustainability of a current franchise system in the Philippines. Variables related to predicting success/performance in the literature (system quality, brand name, age of the franchise chain, franchise outlets ratio, upfront franchise fee, and royalty) were chosen as crucial elements that enhance the sustainability of the franchise system. With limited local literature, a qualitative research study was used through interviews using case research design covering the viewpoints/perspectives of the following parties: a selected franchising company, a franchisee of the selected company, and an expert. The study found that the sample entity has been implementing practices relevant to sustainability. None of the factors presented showed an impact on the other two variables on sustainability: social and environmental. For the franchise system to be sustainable, the franchisor and franchisee could review the franchise agreements and amend it if necessary, innovate and do continuous process improvements. The researcher recommends a separate franchise reporting requirement for entities engaged in franchising activities.