Background of the Study

Foreign markets have opened up around the world in recent decades, allowing many companies to expand from a national level to compete worldwide in other countries. International enterprises can now easily search for new markets and prospects in nations other than their home country thanks to the advent of the international open market. Several factors have motivated franchisors to target African markets, including the removal of trade obstacles in some African countries and the saturation of western markets.

Franchisees have been driven to seek alternative distribution channels for their products and services in African markets as a result of this. (2014, Kendal H) Nigeria is frequently regarded as one of Africa’s most promising markets, which is why numerous franchisees have set up shop there.

Nigeria has been a member of the World Trade Organization since January 1, 1995, as a result of trade reforms that began in the 1990s in Nigeria. According to Kiringia (2004), following 1990, the Nigerian market saw a continuous decline in tariff rates and tarrif bands. This significantly aided Nigeria’s position in the international trade arena. In a World Bank analysis, Malinda (2016) stated that the Nigerian population’s disposable income has increased, resulting in a surge in consumer spending. This means that more Nigerians have additional cash to spend on food, beverages, and shopping. This is partly due to the increased construction of shopping malls and recreational amenities in most Nigerian urban centers. The food court component of most of these shopping malls is usually occupied by one or two fast food businesses. Nigerians were spending more money and time on new drinking and eating habits as a result of this increased consumer spending, according to Malinda, C (2016). For example, more people were eating out during lunch breaks and ordering takeout. According to the Nigeria Franchise Association, a franchise in the food/restaurant industry in Nigeria requires an average beginning investment of $100,000 in both money and time. Organizations must carefully evaluate before entering any market due to the various business operating environments in different countries. Because of the business environment, a company may be able to effectively establish and operate in one country yet find it exceedingly difficult to exist in another. Before entering a new country, a corporation must assess its own resources (financial), structures, and the country’s cultural milieu, among other things. These are the two most significant obstacles that businesses are likely to face when expanding into a new market.

Statement of Problem

Franchising is one of the ways to break into international markets. One of the ways a company can participate in global trade is by franchising. Franchising, like all other modes of entrance, has a number of obstacles that both the franchisor and the franchisee must overcome in order to flourish in the new market. When it comes to the Nigerian market, several franchise companies have struggled to appropriately adapt to the market. Many franchises believe that the marketing methods they have utilized in other countries would succeed in Nigeria. The Nigerian market and customer, on the other hand, are notoriously difficult to break, particularly when it comes to lifestyle choices such as food.

Fast eats, such as the popular fish and chicken eateries, are an example.

In the first quarter of 2016, Nigeria’s GDP expanded by 5.9%. The accommodation and restaurant industry rose by 12.1 percent, according to a World Bank analysis. Despite its past troubles, Nigeria has restored currency market stability in the recent decade, and important structural and economic reforms have contributed to long-term economic growth. Nigeria has become more appealing to investors as a result of this. According to the World Bank’s newest report, the Doing Business in Nigeria Index (2015), Nigeria has improved 28 places in terms of ease of doing business. This means that firms are finding it simpler to establish themselves in Nigeria, although worldwide franchises must still navigate specific restrictions and procedures in order to compete and operate in the country. As a result of this situation, several multinational brands have found it impossible to survive in the Nigerian market, and many have chosen to go. Many franchisees, on the other hand, have been able to research the market and adjust accordingly, allowing them to survive the market. This research aims to uncover the problems that franchisees encounter and how they may overcome them in order to thrive in Nigeria’s rapidly increasing market. The goal of this proposal is to find out what factors (both internal and external) influence the performance of multinational culinary franchises in Nigeria.

Objectives of the study

The primary goal of this research was to determine the elements that influence franchising in Nigeria.

The following aims guided the research:


i. To determine the external elements that influence franchise performance in Nigeria.


ii. To determine the internal elements that influence franchise performance in Nigeria.

Significance of the Study

The conclusions of this study will be useful to worldwide franchisees looking to start up shop in Nigeria, since they will emphasize the problems they will face and how to overcome them. The research will aid management and decision-makers in developing appropriate strategies for entering and surviving in the Nigerian market.

This study will be valuable to academics and business researchers for supporting literary citations as well as proposing subjects for future research. In the subject of international business, the study intends to provide theoretical, practical, and methodological advances. Researchers can utilize the study to advance their research in this field by analyzing the literature and identifying academic gaps that need to be filled. Franchising is a crucial business technique.

Research Question

1. What are the external elements that influence franchise performance in Nigeria?

2. What are the internal elements that influence franchise performance in Nigeria?

Scope/Limitation of the study

The availability and hectic schedules of the managers were a constraint for the researcher during data collecting. Despite the fact that the questionnaires were sent to the managers in a timely manner, several of the managers filled them out in haste as the researchers’ deadline approached. This may have influenced the results of the study because they did not take the time to consider and examine the questions. Another issue was that respondents were unwilling to provide sensitive and confidential information, and hence did not provide adequate feedback. As a result, one census group declined to complete all of the questions.

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