Thesis (MBA)--Stellenbosch University, 2006. / ENGLISH ABSTRACT: New economic activity is essential to create jobs that can absorb the surplus~ abour being created by, amongst other things, the increase in population rate, particular1y in developing countries like South Africa, and rationalisation and increased productivity characterising larger organisations nowadays. Entrepreneurship has been identified as one of the key sources and driving forces behind job creation and long-term economic growth, yet South Africa performs well below average in terms of entrepreneurial activity, particularly when compared to other developing countries. The weaknesses in the training and education system, lack of financial support, lack of research and development transfer and poor access to physical infrastructure were consistently identified in the various Global Entrepreneurship Monitor studies as accounting for the low entrepreneurial activity in South Africa. v-- The franchising business model has be/ldescribed in terms of Porter's value-chain analysis and shows that the franchisor prescribes to the franchisee a business model by providing procedures, guidelines, sharing, training and support for the execution of the primary and secondary activities within the franchisee's value chain. This is achieved through the tangible interrelationships that exist between franchisor and franchisee, which are characterised by the sharing and support of activities that are related within the two value chains and the intangible interrelationships involving the transfer of management know-how through training and mentoring. Considering the nature and the advantages of the franchise business model as described in terms of Porter's value-chain analysis, franchising can go a long way towards overcoming the lack of training and education and access to finance many entrepreneurs in South Africa are faced with. There is therefore evidence to suggest that franchising as a business model can reduce many of the risks associated with starting up a new business and contribute towards the improvement of the entrepreneurial status of South Africa. One of the main rationales behind purchasing a particular franchise is the confidence that the franchise will contribute to making the individual's business success more predictable. For this to become a reality requires that the franchisor provides an individual with a tried and test concept linked to a respectable and well-known brand within a structure that provides extensive initial and continuous support. However, although there are clear guidelines for the structure and conduct within the franchise business model, there are no all-encompassing rules regarding the extent to which all the aspects of a franchise business model have to be present for a particular franchise system to be considered good or bad. One franchise system may allow franchisees more leeway in some aspects of the business and have less formalised interrelationships within its value chain compared to another franchise system yet they may be equally successful systems depending on the extent to which their structure and the personal profile of the prospective franchisee complement each other. Therefore there are different management styles applied within different franchise systems and whether a particular franchise system will be successful for a particular franchisee depends upon the fit between the individual's personal profile, which encompasses the individual's skills, personality, entrepreneurial profile, risk profile, control profile, independence profile, work habits, ambitions, dreams, strengths and weaknesses and the franchise culture, functionality, structure, dynamic inter-relationships and regulation that prevails in the franchise network being considered. These factors, combined with others such as the current franchisor recruitment practices; abuse of the franchise concept and the balance of power considerations between franchisor and franchisee, emphasise the necessity for a prospective franchisee to take responsibility by performing his/her own thorough evaluation. The aim of this study was therefore the development of an analytical framework, which can be used by a prospective franchisee as a guideline for evaluating and deciding whether he/she is suited for franchising, whether a particular franchise opportunity is a sound and legitimate option and whether there is a fit between the personal profile of the individual and the profile of a particular franchise investment option being considered. By following the proposed analytical framework a prospective franchisee is able to develop a personal profile according to recommended guidelines and evaluate each potential franchise being considered / AFRIKAANSE OPSOMMING: Nuwe ekonomiese aktiwiteit is noodsaaklik om werk te skep wat die ooraanbod van arbeid kan absorbeer wat onder andere veroorsaak word deur die bevolkingsaanwas, veral in ontwikkelende lande soos Suid-Afrika, en rasionalisering en groter produktiwiteit wat deesdae groter organisasies kenmerk. Entrepreneurskap is ge'identifiseer as een van die sleutelbronne en dryfvere agter werkskepping en langtermyn ekonomiese groei. Tog presteer Suid-Afrika ver onder die gemiddelde in terme van entrepreneurskapsaktiwiteit, veral as dit vergelyk word met ander ontwikkelende lande. Die tekortkominge in die onderwys- en opleidingstelsel, gebrek aan finansiele ondersteuning, gebrek aan oordrag van navorsing- en ontwikkelingskundigheid en swak toegang tot fisiese infrastruktuur is konsekwent deur die Global Entrepreneurship Monitor ge'identifiseer as redes vir die lae vlak van entrepreneursaktiwiteit in Suid-Afrika. Die konsessie-sakemodel is in terme van Porter se waardekettinganalise beskryf en toon dat die konsessiegewer aan die konsessiehouer 'n sake model voorskryf deur prosedures, riglyne, deelname, opleiding en ondersteuning te voorsien vir die uitvoering van die primere en sekondere aktiwiteite binne die konsessiehouer se waardeketting. Dit word bereik deur die tasbare interverhoudings wat tussen die konsessiegewer en konsessiehouer bestaan, wat gekenmerk word deur die deelname aan en ondersteuning van aktiwiteite wat verwant is binne die twee waardekettings en die ontasbare interverhoudings wat betref die oordrag van bestuurskennis deur opleiding en mentorskap. As die aard en die voordele van die konsessie-sakemodel oorweeg word, soos beskryf in terme van Porter se waardeketting, kan die konsessiebedryf baie doen om die gebrek aan onderwys en opleiding en toegang tot finansiering wat baie entrepreneurs in Suid-Afrika ondervind, teen te werk. Daar is dus aanduiding dat konsessies as sakemodel baie van die risiko's kan verlaag wat verband hou met die totstandbring van 'n nuwe onderneming en kan bydra tot die verbetering van die entrepreneurstatus van Suid-Afrika. Een van die hoofbeweegredes agter die aankoop van 'n spesifieke konsessie is die vertroue dat die konsessie daartoe sal bydra om die individu se besigheid meer voorspelbaar te maak. Ten einde dit moontlik te maak, moet die konsessiegewer 'n individu voorsien van 'n beproefde konsep gekoppel aan 'n gerespekteerde en bekende handelsmerk binne 'n struktuur wat omvattende aanvanklike en deurlopende ondersteuning bied. Alhoewel daar duidelike riglyne is vir die struktuur en bedryf binne die konsessie-sakemodel, is daar geen allesomvattende re~ls betreffende die omvang waartoe al die aspekte van 'n konsessie-sakemodel teenwoordig moet wees ten einde te bepaal of 'n spesifieke konsessiestelsel goed of sleg is nie. Een konsessiestelsel mag konsessiehouers meer vryheid bied in terme van sekere aspekte van die besigheid en minder formele interverhoudings he binne sy waardeketting vergeleke met 'n ander konsessiestelsel, maar hulle mag ewe suksesvolle stelsels wees afhangend van die mate waarin hulle struktuur en die persoonlike profiel van die voomemende konsessiehouer mekaar komplementeer. Daar word dus verskillende bestuurstyle toegepas binne verskillende konsessiestelsels en of 'n spesifieke konsessiestelsel suksesvol sal wees vir 'n spesifieke konsessiehouer hang grootliks af van die passing tussen die individu se persoonlike profiel, wat insluit die individu se vaardighede, persoonlikheid, entrepreneursprofiel, risiko-profiel, kontrole-profiel, onafhanklikheidsprofiel, werkstyl, ambisies, drome, sterkpunte en swakpunte en die konsessie se kultuur, funksionaliteit, struktuur, dinamiese interverhoudings en regulering wat bestaan in die konsessienetwerk wat oorweeg word. Hierdie faktore, tesame met ander soos die huidige konsessiegewer se aanstellingspraktyke, misbruik van die konsessiekonsep en die magsbalans-oorwegings tussen die konsessiegewer en konsessiehouer, beklemtoon die noodsaaklikheid vir 'n voornemende konsessiehouer om verantwoordelikheid te neem deur sylhaar eie deeglike evaluering te doen. Die doel van hierdie studie is daarom die ontwikkeling van 'n analitiese raamwerk wat deur 'n voornemende konsessiehouer gebruik kan word as 'n riglyn vir die evaluering en besluitneming ten opsigte van sy/haar eie gepastheid vir die konsessiebedryf, of 'n spesifieke konsessiegeleentheid 'n grondige en wettige opsie is en of daar 'n passing is tussen die persoonlike profiel van die individu en die profiel van 'n spesifieke konsessiebelegging wat oorweeg word. Deur die voorgestelde analitiese raamwerk te volg, sal die voornemende konsessiehouer in staat wees om 'n persoonlike profiel te ontwikkel volgens aanbevole riglyn en elke potensiele konsessie wat oorweeg word, te evalueer.