Critical success factors of Lebanese restaurant franchisors in the food and beverage industry

Abstract

As a business model, franchising contributes to the gross domestic product (GDP) of the Lebanese economy and helps in the growth and prospers of the Lebanese food and beverage sector while ensuring financial sustainability. From its inception to its expansion nationally and internationally, the management of the franchised restaurant rely on different factors that contribute to its success and prevent its failure throughout different growth phases. The main aim of this study is to determine the critical success factors that contribute to the success of the Lebanese franchising system. In particular, the purpose of the research is to recognize the effect of the following predetermined franchising organizational factors; franchisee selection criteria, franchise chain internationalization, franchisor years of business experience, outlets ownership structure and the franchisee outlet return on investment; altogether, on the success of the Lebanese restaurant franchisor. The nature of the research is quantitative with a cross sectional research design, where the primary data was collected through self-administered survey questionnaire distributed to 60 active Lebanese restaurant franchisors of different sizes and at different franchise lifecycle levels. The results show that having predetermined franchisee selection criteria, early internationalization of the restaurant franchised chain and short payback period of ROI of the franchisee outlet has no significant impact on the success of the Lebanese restaurant franchisor. However, the years of experience in the business and franchise industry along with the proportion of company owned versus franchisee outlets are a determinant of the success of restaurant franchisors in Lebanon.