Franchising as an alternative strategy for developing enterprises in Botswana

Abstract

Botswana is a middle-income economy. It has become dependent on non-renewable resources. Agriculture and manufacturing have failed to develop in a significant way. The small population has not provided adequate demand. The Government has tried a number of strategies in order to diversify the economy. One of these is the promotion of Small and Medium Enterprises (SMEs). Unfortunately, SMEs have failed to thrive, so far. A number of researchers have concluded that SMEs will not thrive due to the fact that Botswana have low entrepreneurial skills. High failure rates are experienced where enterprises are established. The thesis identifies an alternative strategy in the development of enterprises in Botswana. It is generally believed that a franchisee does not need high levels of entrepreneurial skills to succeed. If this is so, Botswana can solve her problem of lack of sufficient enterprises by promoting franchising. The thesis uses the interview technique to assess whether existing franchisees in Botswana have low levels of entrepreneurial skills. Indeed it proves that franchisees have low skill levels compared to non-franchised entrepreneurs. Secondly, the thesis proves that franchisees in Botswana operate as employee-managers. Thirdly, the thesis establishes that franchisees perform better than non-franchised entrepreneurs, even though they have low entrepreneurial skill levels. Lastly, the thesis, using evidence from findings above, and from responses of experts interviewed, establishes that the promotion of franchising is a viable alternative strategy to one that depends solely on non-franchised enterprises.While there are some methodological limitations, like those stemming from a low and unknown franchisee population in Botswana, the use of ordinal data, use of techniques to rate their own skills, and a relatively small sample for franchised and non-franchised entrepreneurs, the statistical techniques used are powerful enough to generate reliable findings.