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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
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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
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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
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NATIONAL SCHOOL OF COMMERCE AND MANAGEMENT
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
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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
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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
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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.