Critical success factors of a fast food franchise system entering the Kenyan market

The fast food industry has become an important part of globalization as people spend many hours working or doing business. The need for quick food services has grown with apparent shortage of free time. With reduced disposable income, a consequence of the global economic downturn, customers seem to shift from the fine dining and full service restaurants to quick service or fast food outlets since the latter are more cost effective. However, a widespread exposure to goods and services has produced a highly informed clientele, the fast food customer expectations seem to grow and follow global patterns. In Kenya international fast food franchises have not done well, fast food franchise systems enter the market but after a number of years they exit or close down operations. On the other hand there is an apparent increase of the ‘eating out trend’ among the Kenyan urban population in keeping with the global trends. It is therefore necessary to establish why the franchises enter the Kenyan market and then close down. This study will determine the critical success factors (CSFs) of franchise systems entering the Kenyan (and East African) market. Introduction Globalization, an emerging trend towards a single integrated and interdependent global economy, has prompted some economists to think of the world as one market and to examine common needs within and across societies (Alon, 2004). With greater interconnections among countries there is greater homogeneity in buyer behaviour (Chan & Justis, 1992; Quinn, 1999). This view of some researchers suggests the adoption of more standardized marketing strategies globally (Buzzell, 1968; Rau & Preble, 1987). In standardizing marketing strategies, firms would standardize the product, price, distribution and promotion programs. Another group of researchers views customers as central to the emergence of marketing strategies (Saegert, Hoover & Hilger, 1985; Khale, 1986) and recommend that these be tailored to each country (Kotler 1986; Douglas & Wind, 1987). From these contrasting views, standardization of marketing programs on the one hand and adaptation to suit local conditions on the other, (Agrawal, 1995; Boddewyn & Grosse,1995), hybrid strategies have emerged (Jain, 1989), influenced by the nature of the product, the country characteristics and organizational factors. Sashi & Karuppur (2002) suggest that in certain situations, it may be more beneficial to standardize some aspects of the marketing strategy across the world, while accommodating local market differences by localizing other aspects. Franchising is one form of managing business enterprises and of expanding into global markets, which permits the adoption of a hybrid marketing mix strategy; standardization of some elements and localization of other elements specific to the country (Sashi & Karuppur, 2002). Under a flexible franchise agreement, the franchisor would standardize some elements of the marketing mix strategy while allowing the franchisee to modify other elements to suit the local market. Franchisors would develop product or service ideas and offer these to franchisees for marketing in specific geographical territories (Norton, 1988a). A franchise business arrangement would require a franchisee to pay an initial fee and royalties to the franchisor. Using a hybrid marketing strategy the franchisor would provide the overall strategy for running the business but may leave aspects of the business to the franchisee to determine, for example local marketing programs, recruitment and routine operations (Sashi & Karuppur, 2002). Research Objective The purpose of this study is to determine the critical success factors of a fast food franchise entering the Kenyan market. In so doing we shall first try to establish how franchisors and franchisees define, identify and evaluate success. Second we shall explore the main issues that concern customers of fast foods. Third we shall identify what fast food customers consider as success. Fourth, we shall identify why customers support or patronize fast food franchises and why they decide to withdraw their support from others.