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Archives of Business Research – Vol. 10, No. 4
Publication Date: April 25, 2022
DOI:10.14738/abr.104.12122. Sayl, Z. (2022). Standardization and Adaptation of International Franchising in Morocco: The case of fast food franchises. Archives
of Business Research, 10(04). 48-54.
Services for Science and Education – United Kingdom
Standardization and Adaptation of International Franchising in
Morocco: The case of fast food franchises
Zineb SAYL
Department of Economics and Management
Ibn Zohr University, Agadir, Morocco
ABSTRACT
This article aims to analyze the appropriate level of standardization and adaptation
that has determined the success of international franchising in Moroccan market.
We propose a comparative study between two American fast food franchises:
McDonald's and Subway. The success of McDonald's franchise and the failure of
Subway franchise in Moroccan market, suppose that there are key factors to entry
in this market. We therefore present a managerial and marketing analyze of each
case to determine the appropriate level of standardization and adaptation. The
results indicate that the international franchise system maintains a high level of the
standardization of the business package, it is also evident to modify the methods of
operations and marketing mix strategy to adapting their products to specific
behavior of the Moroccan consumer. Moreover, the results suggest that the
McDonald's franchise adapts a higher level of adaptation than the subway to entry
Morocco.
Keywords: Franchising, Standardization, Adaptation.
INTRODUCTION
The Franchising consists of a system where by a franchisor concedes to a franchisee, through a
franchise agreement: the right to use a trademark or a patent, the right of exclusive or semi- exclusive distribution of products or services; and the right to use deployment technology and
business administration or operating system developed or held by the franchisor. This
concession involves direct or indirect remuneration, without, however, being characterized by
a working relationship between franchisor and franchisee [1].
The franchising relationship is governed by a contract between a franchisor and a franchisee in
most franchise operations, this agreement provides for the reciprocal commitments and
contains terms and conditions to operating system. It include the clauses of right to use the
franchisor’s business model and determining responsibilities of each of the parties, financial,
confidentiality and exclusivity clauses. Both the franchisor and franchisee must fulfill their
obligations under the contract.
In addition, the key elements of the international franchising include a particular format and
mode of entry, in accordance with the objective of rapid growth into new markets. Global
franchisors “are those looking for homogenous consumer groups and replicating the same
format in foreign countries, (standardisation) making only peripheral changes (adaptations) to
suit local trading circumstances or national preferences but recognisably maintaining the
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Sayl, Z. (2022). Standardization and Adaptation of International Franchising in Morocco: The case of fast food franchises. Archives of Business Research,
10(04). 48-54.
URL: http://dx.doi.org/10.14738/abr.104.12122
original concept”. The successful replication in foreign markets is challenging, as the franchise
agreement (under contract) requires control over the quality of each store, leaving the
franchisee with little scope to tailor his/her offer to suit local trading circumstances [2].
Franchising is an attractive investment, but success is not always guaranteed, a several
franchises are failed in Morocco (for example Nectar, Subway, Benetton, NafNaf, Télé Pizza),
these failures are mainly due to the difficulties of adapting to the specificities of the Moroccan
market and to the absence of market studies. In this context, the Moroccan brands are emerging
because they have a very important competitive advantage which manifests in the high
knowledge of the local market, which facilitates the adaptation of concepts to the demand and
needs of Moroccan consumers [3]. Although, in this study, we aim to identify the degree of
standardization and adaptation of international franchising to entry and success in Moroccan
market .
EVOLUTION OF FAST FOOD SECTOR IN MOROCCO
Morocco is characterized by a large population (estimated at over 36 million inhabitants. 2019),
with a large urban population, estimated to 63 % of the total population (according to the World
Bank 2019). Labor force estimated at more than 12 million inhabitants in 2019, with a
significant female labor participation (24 % of total labor force) [4].
The Moroccan consumer has limited purchasing power, with a nominal GDP per capita of 3,204
$ in 2019, with a rapidly emerging middle-class in large cities. The lifestyle of the Moroccan
consumer is changing. The current generation of young adults and affluent Moroccans have a
good level of disposable income and are more likely to accept and appreciate western-style
foods, including convenient packaged food and foods with health and wellness benefits [5].
Morocco has a rich culture that is a mixture of Arab, Berber and other African and European
influences. In Morocco, Arabs and Berbers account for 99.1% of the population. Also, Moroccan
culture is a distinctive blend of indigenous Berber customs with influences from Arab, Jewish,
and European cultures. The major religion is Islam.
Table 1. Key socio-demographic indicators of Morocco from 2000 to 2019
2000 2004 2008 2012 2016 2019
Population, total
28.79
3.679
30.11
5.214
31.53
6.811
33.24
1.898
35.12
6.296
36.47
1.769
Population ages 15-64 (% of total population) 61,2 63,1 64,7 65,8 65,8 65,7
Labor force, total
9.566.
346
10.45
9.942
11.08
9.710
11.76
0.785
11.78
0.964
12.06
7.484
Labor force, female (% of total labor force) 24,9 26,7 26,5 25,9 24,5 24,2
Wage and salaried workers, total (% of total
employment) 41,0 39,6 45,5 46,5 48,1 49,8
Urban population (% of total population) 53,3 54,6 56,9 59,1 61,4 63,0
GDP per capita (current US$)
1.334,
9
1.952,
9
2.890,
4
2.912,
7
2.896,
7
3.204,
1
Households and NPISHs Final consumption
expenditure per capita growth (annual %) 0,6 3,2 6,3 2,7 2,3 2,0
Source: author
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Archives of Business Research (ABR) Vol. 10, Issue 4, April-2022
Services for Science and Education – United Kingdom
With its young population, increasing urbanization, and steady GDP growth, Morocco is already
seeing growth fast-food restaurants, such as McDonald’s, Domino’s, and Pizza Hut.
Representing 55% of Morocco’s population, young people under the age of 25 are the key
market segment driving demand for Western culture and foods [5].
In recent years, the fast food market in Morocco experienced rapid development; it is marked
by the establishment of a large number of international chains. According to statistics of
Moroccan Ministry of Industry, Trade and New Technologies, in 2007 the fast food franchises
represent 7% of the franchise sector, and 10% in 2010, but in 2018, this percent is multiplied
to 20%. In 2021, the fast food market has more than 8000 points of sale and generates an
important turnover that exceeds 16 billion dirhams. The international chain McDonald’s was
the first group in Morocco to introduce the franchising concept in the country.
Moroccan consumer behavior
Moroccan families rarely eat ready-made foods; they prefer to buy fresh ingredients to produce
their meals at home, however, among young adults, Western influences are evident, they are
more likely to count on fast food.
Changing lifestyles
Moroccans living in the larger cities have increasingly less time to eat at home, especially at
lunchtime during the week. Moreover, with the increased acceptability of consuming meals
outside of the domestic sphere, it is becoming increasingly common to eat out with family
members, friends, and even business relations [6].
Strong growth of healthy foods
Many Moroccan consumers are becoming more and more health conscious and experiencing
Healthy lifestyles. Health and convenience are the two major trends emerging in the Morocco
food market.
International Franchising System
McDonald's and Subway are an American multinational fast food companies. McDonald's
founded in 1940, it is the largest restaurant chain in the world in the terms of turnover [7].The
international chain has registered more than 38 695 restaurants in more than 119 countries,
serving more than 69 million customers daily. Subway founded in 1965, it was the fastest- growing franchise in the world in 2015 with 42,227 outlets located in more than 110 countries
and territories [8].
Table2. Franchising system
Mcdonald's Subway
Creation 1940 1965
Origin American brand American brand
Product Hamburgers Submarine sandwiches
Slogan “I’m lovin’ it” “Eat Fresh”
Number of restaurants (2019) 38 695 43405
Number of franchisees - 20000
Area served (countries ) 119 110
Number of employees 2,5 millions -
Number of customer 69millioncustomers -
Source: author