NATIONAL SCHOOL

3rd year Commerce

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Wednesday, March 20th, 2006

Study Project:

FRANCHISING IN MOROCCO, A PROMISING SECTOR

By:

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and future customers about how the companys products and services can help them. Since few years, franchising knows a remarkable boom in Morocco. Today, it exists on the market a mass of Moroccan and foreigner ensigns. Appeared in the beginning of the 20 century in France and the USA, franchising has quickly expanded starting from the seventies in westerner countries. In Morocco, recent phenomenon, the first establishments date from the sixties. But it is in the nineties that international ensigns got developed in our kingdom, with approximately 210 ensigns installed and daily announcements of new franchises on the Moroccan territory. It is more than a method for distributing products and services that satisfy customer needs. It becomes a current life style for the consumers. So what are the types of franchising that exist in Morocco? What position the Moroccan franchises takes on the local market in front of the foreigner ensigns? Why franchising is so successful?

ranchising is a business strategy a company may use in capturing market share, getting and keeping customers. It is a marketing system for creating an image in the minds of current

OUR AIMS

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Why franchising is successful? Is it the Moroccan culture or the mode of distributing that makes it successes? Why Moroccan costumers prefer the foreign ensigns instead of the Moroccan ones? Is it a matter of quality or just a wrong image of the Moroccan ensigns? How the Moroccan consumers behave and think when deciding on what brand to choose: the Moroccan brand or the foreigner one? Our objective by asking those questions is to test if franchising is just a mode of distribution that is neutral and does not have any effect on Moroccan consumer's behaviour or is it more than that, one of the effective forms of globalization.

PROCEDURES
We will proceed to answer those questions by carrying out our study, by distributing the questionnaire to costumers in sales locations, restaurant and the following stores in the city: Macdonald's Pizza Hut Pepe jeans Yves Rocher Jeff de Bruges Swatch Agatha Flou Flou Marwa Bigdil Tequila Solo Indigo Lacoste Cater Pillar Mostt Venizia Ice In Barbecue Ibis Hotel Avis EuropCar

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In addition to those tools, we will collect data and information from official sources:" Agadir Commerce Chamber" and "Regional Center of Investment". Also we will make interviews with several managers of franchises.

SCOPE OF THE PAPER

Our study will contain two main parts. The first one is about the theoretical notions. It will define the principles of franchising; identify a typology of different franchises that exists till now. It also aims drawing an historical account of franchises over the world and time. Opposing the franchisor to the franchisee goals, we will compare rights and obligations that both of the parts must respect. In the second part, we will try to find answer's elements to our puzzle. Testing both of hypotheses to see which is right, is the method we will work with. First, it is important to know how to create a franchise and what is the process that the actors on franchising go through when launching a franchise, how is it working between the franchisor and the franchisee. Secondly, we will analyze the mapping of franchises in Morocco by activity sectors and origin. Besides, we will study cases of failures and success, and explain the factors that had lead the franchisees to both situations. Finally, we will visit Agadir's franchises stores, asking consumers about their opinions. Part one: theoretical part
1. What is franchising? By Karima 2. historical account, by Widad 3. Types of franchising , by Amal 4. Franchisor/Franchisee Relation, by Widad

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Part two: practical part

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1. How to create a franchise in Morocco? By Karima 2. Moroccan versus Foreign franchises, by Amal

3. Distribution of franchises by activity branch, by Widad

4. Success and Failures stories in Morocco, by Widad 5. Franchising ensigns in Agadir, by Karima

6. Consumers opinions Hopping that we will get enough and the right information, we will formulate the conclusion of our research and answer the questions we aim.

REVIEW OF LITERATURE
Robert Gappa, the president of Management 2000, Houston, TX, a firm specializing in assisting companies in the use of franchising as a growth strategy, says that "Franchising is the most popular system for growing a business in the United States today" and he adds that " Franchising advantages over going into business for yourself include; opening quicker, experiencing success sooner, developing a customer base faster, having less risk and being more profitable. Your success as a franchisee is based on the proven success of the franchisor to operate company units and upon the success of existing franchisees". But he also advances, regardless of the business strategy, "Franchising is successful because we are people of habit and are brand-driven", talking about Americans. So what about Moroccans? "A franchise is like a marriage" is Lou Gurnick's statement, founder of Franchise Business International, Inc. According to him, a franchise

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system is a success kit because all the necessary tools are provided. He judges that franchise success is due in large part to thorough stepby-step franchisee training and careful supervision from the franchisor. However, he thinks that "the franchise system also serves the public well. A franchisee must be capable, imaginative entrepreneur who can detect the many wide gaps in the franchisor distribution system and do something to close them. "Most reputable franchise operations have succeeded because they meet such needs." According to the Moroccan Office of Industrial and Commercial Property (OMPIC), the reasons of success are numerous and based on four pillars: the technical and commercial assistance; the franchisee motivation; rapid covering of the market; and relative low cost for the franchisor to expand. Nevertheless, even if franchising has proven itself in many sectors, success is not always guaranteed. Indeed, at the same time that many franchises succeed, others disappear. What had caused those failures? What is the part missing to the puzzle? For Yves Sassi, president of the French Observatory of Franchise, the success of franchisee depend on concept feasibility in Morocco: are the local consumers interested in the product, are the practiced prices acceptable, legislation, habits, customs taxes do it allow to the investor making profits? And the franchisor, does he provide a real help?

Considering the previous statements, we will determine what are the factors reacting on the Moroccan market. Joining the different points of view of those authors will allow us to test and compare the hypothesis. In a simple way, we are going to prove that, in fact, the points of view don't

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converge a lot. Behind the economic and successful business strategy, franchise sales a culture, ideologies and styles of life, and the Moroccan consumers are unaware of that they are consuming a globalization product. We will try to explain in proportion as we advance in our study, how the mode of distribution that is franchise has become a form of globalization.