Factors Affecting the Performance of Franchisees in the Fast Food Industry in Kenya

Abstract

As Kenya continues to embrace the concept international trade and of opening up borders through international business, many international organisations have seen the potential of the Kenyas economy and its market. The fast food industry in Kenya is pne of the fastest growing and this has began attracting many international players to compete in this space. However, there are several factors that an internationals fast food organisation has to consider as they enter and operate in the Kenyan market. This study sought to establish the factors (both internal & extternal) that affect the performance of international fast food franchisees operating in Kenya. This population of this study was census of all the international fast food franchisees in Kenya. The study is based on primary data which was collected through questionnaires. The results show that the five key factors that affect the perfomance of fast food franchisees in Kenya are the firms networks, the firms product/service, the country risk(political/economic), The intensity of competition and the size of the market. The study recommends that government needs to provide more information on the industry and provide clear guidelines that govern specifically the fast food industry in Kenya. The study was carried out to establish the factors that affect the performance of international fast food franchisees in Kenya. The study used the four internal factors and six external factors as proposed by Hollensen (2011). The researcher sought to establish if any of these factors affect the organizations sampled in the census and if so, to what extent they affect the performance of organizations. While the Kenyan market is rich with potential for international fast food franchises to exploit, some have not yet been able to crack the industry and the researcher sought to understand what factors affect their performance when they set up in Kenya. The study shows that while all four factors i.e. firm size, international experience, product/service and firm network affect the performance of a franchisee, there are two main factors that fast food franchisees should consider. The two internal factors that affect to the greatest extent are the product/service of the firm and the firms‘ networks in the host country. From the research findings, all the external factors considered in this study were found to have an effect on the performance of international fast food franchisees. The study concluded that the three external factor that fast food franchisees should pay attention to are; country risk, intensity of competition and the market size if they are to perform well in the industry. The study also shows that the ease of entry into the fast food industry for franchises is average which means that if a firm takes into consideration all the factors mentioned above, it will be able to enter and compete in the fast food industry in Kenya. The study recommends that government should create a public information resource easily accessible for those seeking to enter the fast food franchising in Kenya. The Study further recommends that the revival of the Kenya Franchise Association to help set structures, policy and guidelines interpretations around fast food franchising in Kenya.