MICRO FRANCHISING: A BUSINESS APPROACH TO INCREASING SELF EMPLOYMENT & FIGHTING POVERTY IN SOUTH AFRICA

Abstract

Micro franchising differs from traditional franchising as it aims to employ low-income individuals at the Base of the Economic Pyramid (BoP) rather than generate wealth. South Africa is known to have high unemployment rate, and many households live in poverty; this study aims to address such challenges. The microfranchise business model is meant to create jobs for those without employment. Limited studies have investigated microfranchising as a tool for self-employment and alleviate poverty in Thohoyandou, Limpopo Province, South Africa. This study was conducted to understand how microfranchising increase self-employment and reduces poverty in Thohoyandou. The study explored microfranchising as a business tool for self-emplyment and to fight poverty in Thohoyandou, Limpopo province. A qualitative research approach was employed with a sample of eight participants that comprised microfranchise businesses in Thohoyandou. The convenience sampling technique was adopted to select the participants. Primary data was gathered through in-depth interviews using a structured interview guide. The study's findings established that microfranchising tools such as business in a box, comprehensive training, employment creation, good marketing mix, improved asset base, improved standard of living, increased economic growth and market gap help reduce social ills. The study recommends that the government offer financial support to the microfranchisees and prioritize microfranchising as a business model that alleviates poverty. The study's major limitation is that the research was done in Thohoyandou, which means the findings may not be generalized in other towns, municipalities, or provinces beyond Thohoyandou.