Franchising in the banking environment : middle management program
Franchising as a growth tool is becoming a very appealing business model which has highly successful examples in almost every business sector in the world. However in the banking environment, First National Bank has been the first bank to take the lead in South Africa by introducing the franchise concept to create value for its customers. Not all businesses are suitable to become franchises therefore the aim of this research was to establish what critical success factors can be considered as essential when a bank decides to implement the franchise concept. Banks need to decide if franchising is the best option. Passing the test of franchise-ability does not necessarily mean that is the optimum route to follow. It is essential that a prospective bank considers the criteria for successful franchising before embarking on a franchise operation. FNB complied with most of the criteria identified. Part of the goal of this research was to establish what the benefits and challenges or disadvantages will be for a bank that is considering implementing the franchise concept. Franchising offers very impressive benefits to banks such as to create value for their customers and to streamline their operations. However banks need to realise that implementing the franchise concept to their organisation is a very demanding and difficult task. To change the traditional bank business concept to the franchise concept could be very challenging. The information was compiled by way of a literature study and empirical study. In the empirical study the information was obtained through a questionnaire delivered by hand and collected within 48 hours. A total of 20 respondents returned the questionnaires. The data was processed and conclusions and recommendations made. The study demonstrated the most important critical success factors to be considered when implementing the franchise concept to the banking environment. The ten most important requirements identified in the literature study have been confirmed by the FNB management in the Sedibeng, area who were the respondents of the empirical study. Part of the critical success factors also included the requirements needed to be a successful franchisor or franchisee. Through the study the most important benefits and challenges or disadvantages associated with the franchise concept in the banking environment have also been identified. It is essential that banks realise the impact that the implementation of the franchise concept will have on their organisation. They need to be willing and ready to take the challenge. Ultimately it will be worthwhile for banks to consider this unique approach to business.