Philippine E-Journals

Marketing Skills as Predictors of Profitability of Franchisees in Davao City, Philippines

James Q. Campoamor | Joanna Lynn L. Mercado | Eduardo D. De Gracia

 

Abstract:

Franchising has assumed a popular role in starting and expanding businesses worldwide. Entrepreneurs, both neophytes and experienced, are keenly interested in taking advantage of franchising as an avenue for venturing into new businesses. Franchisees’ success and failure experiences need to be studied to guide would be and existing entreprenuers to wield the franchising business approach more profitably. The study was conducted to determine the relationship between franchisees’ traits and the profitability of their franchised business in Davao City, Philippines. Franchisees’ traits included system follower, marketing skills, business and management skills, communication skills and leadership skills, and profitability was modified as very high, high, and moderate. Descriptive statistics and multivariate analysis specifically discriminant analysis were used to test the hypothesis of the study. Respondents were 35 franchisees operating for the last 3 years (2010-2012) in the different malls in Davao City. Results showed that the franchisee level of traits was very high while the franchised business level of profitablity in terms of return on investment (ROI) was high. And, the franchisee level of marketing skills was the trait that best predicts the franchised business’ level of profitability.