Franchising New Version

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NATIONAL SCHOOL OF COMMERCE AND MANAGEMENT

Study Project:

FRANCHISING IN MOROCCO,

A PROMISING SECTOR

By:

3rd year

Commerce

Wednesday, March 20th, 2006




ranchising is a business strategy a company may use in

capturing market share, getting and keeping customers. It is a

marketing system for creating an image in the minds of current

and future customers about how the company’s products and services

can help them.

FSince few years, franchising knows a remarkable boom in Morocco.

Today, it exists on the market a mass of Moroccan and foreigner

ensigns.

Appeared in the beginning of the 20 century in France and the USA,

franchising has quickly expanded starting from the seventies in

westerner countries. In Morocco, recent phenomenon, the first

establishments date from the sixties. But it is in the nineties that

international ensigns got developed in our kingdom, with approximately

210 ensigns installed and daily announcements of new franchises on the

Moroccan territory.

It is more than a method for distributing products and services that

satisfy customer needs. It becomes a current life style for the consumers.

So what are the types of franchising that exist in Morocco?

What position the Moroccan franchises takes on the local market in front

of the foreigner ensigns?

Why franchising is so successful?

OUR AIMS




Why franchising is successful? Is it the Moroccan culture or the mode

of distributing that makes it successes?

Why Moroccan costumers prefer the foreign ensigns instead of the

Moroccan ones? Is it a matter of quality or just a wrong image of the

Moroccan ensigns?

How the Moroccan consumers behave and think when deciding on what

brand to choose: the Moroccan brand or the foreigner one?

Our objective by asking those questions is to test if franchising is just a

mode of distribution that is neutral and does not have any effect on

Moroccan consumer's behaviour or is it more than that, one of the

effective forms of globalization.

PROCEDURES

We will proceed to answer those questions by carrying out our study, by

distributing the questionnaire to costumers in sales locations, restaurant

and the following stores in the city:

Macdonald's

Pizza Hut

Pepe jeans

Yves Rocher

Jeff de Bruges

Swatch

Agatha

Flou Flou

Marwa

Bigdil

Tequila Solo

Indigo

Lacoste

Cater Pillar

Mostt

Venizia Ice

In Barbecue

Ibis Hotel

Avis

EuropCar




In addition to those tools, we will collect data and information from

official sources:" Agadir Commerce Chamber" and "Regional Center of

Investment". Also we will make interviews with several managers of

franchises.

SCOPE OF THE PAPER

Our study will contain two main parts.

The first one is about the theoretical notions. It will define the principles

of franchising; identify a typology of different franchises that exists till

now. It also aims drawing an historical account of franchises over the

world and time. Opposing the franchisor to the franchisee goals, we will

compare rights and obligations that both of the parts must respect.

In the second part, we will try to find answer's elements to our puzzle.

Testing both of hypotheses to see which is right, is the method we will

work with. First, it is important to know how to create a franchise and

what is the process that the actors on franchising go through when

launching a franchise, how is it working between the franchisor and the

franchisee. Secondly, we will analyze the mapping of franchises in

Morocco by activity sectors and origin. Besides, we will study cases of

failures and success, and explain the factors that had lead the

franchisees to both situations. Finally, we will visit Agadir's franchises

stores, asking consumers about their opinions.

Part one: theoretical part

1. What is franchising? By Karima

2. historical account, by Widad

3. Types of franchising , by Amal

4. Franchisor/Franchisee Relation, by Widad




Part two: practical part

1. How to create a franchise in Morocco? By Karima

2. Moroccan versus Foreign franchises, by Amal

3. Distribution of franchises by activity branch, by Widad

4. Success and Failures stories in Morocco, by Widad

5. Franchising ensigns in Agadir, by Karima

6. Consumers opinions

Hopping that we will get enough and the right information, we will

formulate the conclusion of our research and answer the questions we

aim.

REVIEW OF LITERATURE

Robert Gappa, the president of Management 2000, Houston, TX, a firm

specializing in assisting companies in the use of franchising as a growth

strategy, says that "Franchising is the most popular system for growing a

business in the United States today" and he adds that " Franchising

advantages over going into business for yourself include; opening

quicker, experiencing success sooner, developing a customer base

faster, having less risk and being more profitable. Your success as a

franchisee is based on the proven success of the franchisor to operate

company units and upon the success of existing franchisees". But he

also advances, regardless of the business strategy, "Franchising is

successful because we are people of habit and are brand-driven", talking

about Americans. So what about Moroccans?

"A franchise is like a marriage" is Lou Gurnick's statement, founder of

Franchise Business International, Inc. According to him, a franchise




system is a success kit because all the necessary tools are provided.

He judges that franchise success is due in large part to thorough step-

by-step franchisee training and careful supervision from the franchisor.

However, he thinks that "the franchise system also serves the public

well. A franchisee must be capable, imaginative entrepreneur who can

detect the many wide gaps in the franchisor distribution system and do

something to close them. "Most reputable franchise operations have

succeeded because they meet such needs."

According to the Moroccan Office of Industrial and Commercial

Property (OMPIC), the reasons of success are numerous and based on

four pillars: the technical and commercial assistance; the franchisee

motivation; rapid covering of the market; and relative low cost for the

franchisor to expand. Nevertheless, even if franchising has proven itself

in many sectors, success is not always guaranteed. Indeed, at the same

time that many franchises succeed, others disappear. What had causedthose failures? What is the part missing to the puzzle?

For Yves Sassi, president of the French Observatory of Franchise, the

success of franchisee depend on concept feasibility in Morocco: are the

local consumers interested in the product, are the practiced prices

acceptable, legislation, habits, customs taxes… do it allow to the investor

making profits? And the franchisor, does he provide a real help?

Considering the previous statements, we will determine what are the

factors reacting on the Moroccan market. Joining the different points of

view of those authors will allow us to test and compare the hypothesis. In

a simple way, we are going to prove that, in fact, the points of view don't




converge a lot. Behind the economic and successful business strategy,

franchise sales a culture, ideologies and styles of life, and the Moroccan

consumers are unaware of that they are consuming a globalization

product. We will try to explain in proportion as we advance in our study,

how the mode of distribution that is franchise has become a form of

globalization.

Documents

Franchising New Version