A PROJECT REPORT

ON

OPPORTUNITIES AND CHALLENGES FOR FRANCHISE

RESTAURANTS IN BANEPA

Submitted by

DEVRAJ TAMANG

TU Reg. No: 7-2-357-27-2017

TU Exam Roll No: 4822/17

Bachelor of Hotel Management (BHM)

Nepal College of Travel and Tourism Management (NCTTM)

Uttardhoka, Kathmandu, Nepal

Submitted to

Office of the Dean

Faculty of Management

Tribhuvan University

Kirtipur, Kathmandu

In the partial fulfillment of the requirements for the degree of

Bachelor of Hotel Management

August, 2022
 RECOMMENDATION

I hereby recommend the approval of the thesis entitled "Opportunities and Challenges
for Franchise Restaurant in Banepa”. Mr. Devraj Tamang has prepared the thesis
under the guidance and supervision as a partial fulfillment of the requirement of the
bachelor in hotel management. Therefore, this project report has been recommended
for its evaluation.

Mr. sunit Adhikari

Thesis Supervisor

NCTTM College

Uttardhoka, Kathmandu

I
 CERTIFICATION

Approved by:

…………………………..

Supervisor

External Examiner

Sunit Adikari Tribhuvan University

NCTTM Date:

Date:

……………………………..

Head of Department

Bhu parsad sharma

Date:

II
 EXECUTIVE SUMMARY

Franchising is a popular and effective method of conducting and expanding business

operations. A franchise is a method of business where a franchis or who establishes
the brand’s trademark or trade name and a business system, distributes products or
services to the franchisee who pays a royalty and often an initial fee for the right to do
business under the franchis or name and system.Franchising is basically a right which
manufacturers or businesses give to others. This study has been conducted to know
about the opportunities and challenges for the Franchise restaurant in Banepa. To get
that objective owners, staffs and customers were asked questions and interviewed and
informations were collected through primary and secondary sources. After analyzing
the responses of customers I got different Findings.

It may take some time to get profit if a world famous franchise restaurants like KFC,
Burger King, Pizza hut etc. is established as they have a huge investment on the
property. Most of the respondent were ready to spend moderate amount of money. But
in the future it is sure that they will make a good business as food culture is increasing
day by day and Nepalese chain restaurants with moderate price range of food are
making a good business in Banepa. Another thing I found was the most preferred dish
was MOMO and crunchy fried chicken. So Nepalese franchise restaurant with those
products can launch their establishment in Banepa. As young age people were the one
who were visiting restaurant most, existing franchise restaurants in Banepa should
focus on the demand and supply of foods as their interest. And marketing strategies
should be applied by focusing on them. They also need to focus on the service quality
and the training of the staff to retain the customers.

III
 DECLARATION

I, Devraj Tamang hereby declare that the work presented in this project is a genuine
work done originally by me under closer guidance and supervision of the respective
supervisor, following stipulated guidelines and the same report has not been submitted
elsewhere for the award of degree. All sources of information referred in this work are
acknowledged with reference to respective authors. I firmly understand that this
document becomes a university property on its acceptance and promise to abide by
the respective norms of the university in this report.

Date : ...................................

Devraj Tamang: .....................

IV
 ACKNOWLEDGMENTS

I like to express my deepest gratitude to all those who provided me the potential in
completion of this entire report. I would like to give a special appreciation to our
mentor, Mr Sunit Adhikari. I am really thankful for his aspiring guidance and friendly
advice during the assignment. Also his involvement in motivating suggestions and
support helped me to manage in timely completion of this Internship Report.

I am really grateful to all those owner, staffs and customers who helped me get
information about Franchise restaurant and their business and interest. I would like to
thank Mr .Pranesh Sharma, principal of Nepal College of Travel and Tourism
Management and NCTTM’s BHM Coordinator Mr Bhu Prasad Sharma, who helped
stimulating encouragement helped me in writing of this internship report. Lastly, I
wish to express my sincere appreciation and gratitude to all those who in one way or
the other who made this report successful.

Yours sincerely,

Devraj Tamang

2017

V
 TABLE OF CONTENTS

TOPIC PAGE

RECOMMENDATION .............................................................................................…..........I
CERTIFICATION………………………………………………………………… .……......II
EXECUTIVE SUMMARY ....................................................................................................III
DECLARATION ................................................................................................................... III
ACKNOWLEDGMENTS ..........................................................................................…..IV
LIST OF TABLES .............................................................................................................. VII
LIST OF FIGURES............................................................................................……........ VIII
ACRONYMS AND ABBREVIATIONS ...............................................................................IX

CHAPTER I ........................................................................................................................(1-3)
INTRODUCTION ...................................................................................................................11
1.1Banepa City................................................................................................................... 1
1.2 Purpose of the Study.....................................................................................................2
1.3 Significance of the Study..............................................................................................3
1.5 Limitations of the Study............................................................................................... 3

CHAPTER II ...........................................................................................................................5
REVIEW OF LITERATURE ....................................................................................................5
2.1 Review of Literature ....................................................................................................5

CHAPTER III........................................................................................................................ 11
RESEARCH METHODOLOGY............................................................................................ 11
3.1 Research Design......................................................................................................... 11
3.1.1 Qualitative Data Interpretation.........................................................................11
3.1.2 Quantitative Data Interpretation.......................................................................12
3.2Sources of Data ...........................................................................................................12
3.2.1 Primary Data .................................................................................................... 12
3.2.2 Secondary Data ................................................................................................ 12
3.3Sample Design ............................................................................................................13

VI
 3.4 Population...................................................................................................................13
3.5 Sample Size ................................................................................................................
13
3.6Sampling Procedure ....................................................................................................13
3.7 Data Collection Techniques/ Tools............................................................................ 13

CHAPTER IV ................................................................................................................ 14
DATA ANALYSIS AND INTERPRETATION………………………….…………..….14
4.1 Introduction ............................................................................................................... 14
4.2 Flow of customers in franchise restaurant in Banepa according to Age group .........14
4.3 Respondents’ response on degree of their visiting restaurant ................................... 15
4.4 Respondents’ money spend on restaurant:................................................................. 16
4.6 Respondents’ response about price of food:...............................................................18
4.7 Respondent’s responses on profile by favorite dish................................................... 19
4.8 Respondents’ response on Can Franchise restaurants make good business in
Banepa? ........................................................................................................................... 20
4.9 Respondent’ response on needed improvement......................................................... 21

CHAPTERV..................................................................................................................... 23
FINDINGS, RECOMMENDATIONS AND CONCLUS………………………………23
5.1 Findings ..................................................................................................................… 23
5.1.1 Opportunities..................................................…………................................................23
5.1.2 Challenges................................................…………..................................................... 23
5.2 Recommendations..................................………….......................................................... 24
5.3Conclusion............................................…….……..............................................................25
Bibliography ....…......................................……..........................................................… 27

VII
 LIST OF TABLES

Table 4.2 : Customers according to age group

Table 4.3 : degree of customers visiting restaurant

Table 4.4 : Money spend by customers

Table 4.5 : Guest flow during the visit of customers

Table 4.6 : View price of the food

Table 4.7 : View on favourite dish

Table 4.8 : Possibility of making good business

Table 4.9 : Need of Improvement

VIII
 LIST OF FIGURES

Figure 4.3 : Degree of customers visiting restaurant

Figure 4.4 : Money spend by customers

Figure 4.5 : Guest flow during the visit of customers

Figure 4 6 : View price of the food

Table 4.7 : View on favourite dish

Figure 4.8 : Possibility of making good business

Figure 4.9 : Need of Improvement

IX
 ACRONYMS AND ABBREVIATIONS

BHM : Bachelors Of Hotel Management

NCTTM : Nepal College Of Travel And Tourism Management

E.O : Entrepreneurial Orientation

X
 CHAPTER I

INTRODUCTION

1.1 Background of the Study

A franchise is a method of business where owner who establishes the brand’s

trademark or trade name and a business system, distributes products or services to the
franchisee who pays a royalty and often an initial fee for the right to do business under
the 's name and system. In a franchise business, the owner or franchise provides
license to the franchisees for operation of the business along with its products,
branding, and knowledge in exchange for a franchise fee. The franchisee may sell
these products and services by operating as a branch of the parent company. So it’s a
an arrangement where franchisor grants or licenses some rights and authorities to
franchisee. In franchise business, both parties sign an agreement which states terms
and conditions related with the business . A Franchising is a well-known marketing
strategy for business expansion which provides new businessmen with a ready-made
business that already has processes, procedures, strategies, branding and trademark in
place.The practice of creating and distributing the brand and franchise system is most
often referred to as franchising. Franchising is basically a right which manufacturers or
businesses give to others. This right allows the beneficiaries to sell the products or
services of these manufacturers or parent businesses. These rights could even be in
terms of access to intellectual property rights. It creates a business relationship
between two parties where one party allows another to sell its products and intellectual
property.Banepa City

Banepa is the historical town with the many temples and old traditions and cultures.
The city is situated at about 1500 meter above the sea level in central Nepal which is
about 25 kilometers east from Kathmandu. Banepa is situated in Bagmati province and
Kavrepalanchok district. Banepa municipality has an area of 54.59 square kilometers
with 14 wards. As per 2011 population census, Banepa Municipality had total
population of 55628 including 27305 males and 28323 females.The old Banepa town
area is bounded by Chandeshwari khola in the east, Punyamata khola flowing from

1
west to south, and about 6.31 sq. Km surrounded by hills and mountains and small
villages. The core areas of Banepa municipality or old Banepa includes Hansraj marg
area, Bholakha tol, Layaku chuar area etc. Majority of the population are Newar
ethnicity whereas there are Brahmin, Chhetri, Tamang and Magar also. People from
different religious background like Hinduism, Buddhism, Christianity can be found in
Banepa. Most of people are engaged in occupation like agriculture , manufacturing ,
whole sale and retail trade , accommodation and food industry , financial institutions
etc. Major attractions of Banepa includes Chandeswori temple, Dhaneswor temple,
Chandeswori jatra, Kanya puja etc.

Banepa is the combination of two Newari words ”Bane” and ”Pa” in which the Bane
means Business or Trade and Pa means Place meaning the Place of business. There
were many ancient names of the Banepa such as Banepur, Baniyapur and Banipur.
Banepa had trade relations with Tibet from ancient times so it is also known as
‘Bhont’, ‘Bhonta’ and ‘Bhondey’.It is believed to be the state with the oldest
settlement of people when the entire Kathmandu valley was covered with water.

1.2 Purpose of the Study

The main objectives to prepare this project are as follows:

• To know about opportunities and challenges for local franchise

restaurants in Banepa
• To motivate new investors to invest in franchise business .
• To establish good food culture in Banepa with the establishment of
more franchise restaurants.
• To know about investing in franchise restaurants is safe or not.
1.3 Significance of the Study

Franchise restaurants are being popular throughout the country Nepal . Food culture is
being developed day by day . Banepa can not remain untouched with this . Some
Nepali franchise restaurants like Chicken station have been popular in Banepa too.
This study is conducted to know about the opportunities and challenges for franchise
restaurants in Banepa . This study will help the new investors to know about the guest
2
flow in franchise restaurants in Banepa ,how they are operating and is this suitable to
invest in franchise restaurants in Banepa or not . This study will help to develop more
food culture in Banepa if new franchise restaurants are developed with the reasonable
food price.

1.4 Research Questions

This research aims to answer following questions .

• Is investing in franchise restaurants in Banepa secure ?

• What do people think about increasing food culture in Banepa ?
• What are the challenges to operate franchise restaurant in Banepa ?
• What are the opportunities for the operation of franchise restaurants in Banepa ?

1.5 Limitations of the Study

Any study has its own limitations. This study also has some limitations and they are
listed below:

• Due to lack of time only 45 consumers were taken as a sample .

• As there were only two franchise restaurants in Banepa , only those 2
restaurants were visited .
• Due to limited prior study in the field, it was difficult to convince the authority
for the information of the study area .
• Restaurants were not ready to provide all detailed information for the study .
• Most of the data is collected from secondary source and internet due to
inconvenient time availability.

3
 CHAPTER II

REVIEW OF LITERATURE

2.1 Review of Literature

Franchising is a popular and effective method of conducting and expanding business

operations. Franchising is a popular method of entering international markets because
it mitigates risk through partnerships with local franchisees. When aiming to grow, a
company starts a franchise process by issuing licenses to independent franchisees,
granting them the right to conduct business operations under the franchisor brand
name (Chaudey & Fadairo, 2010). It facilitates growth by increasing stores, production
units, and other outlets for selling products or services (Baena & Cervino, 2012). Due
to its benefits, companies now use franchising to expand across international borders,
creating a trend in international franchising, which has become increasingly popular in
recent decades (Dant et al., 2011).

Numerous factors influence the success of franchising, including the efficiency and
dedication with which the franchisee conducts the business operations and
communication between the franchisor and franchisee (Nijmeijer et al., 2014). The
number of business organizations opting for international franchising is increasing
rapidly, demonstrating the improved success rate of franchising operations over recent
years. One of the reasons for that success is the strategic approach established by
franchisees and the advent of globalization, which has provided new opportunities for
businesses and increase the ability to operate across national borders (Alon et al., 2012;
Kerdpitak & Jermsittiparsert, 2019).

During recent decades, several reviews of franchisee performance literature have been
conducted, such as Watson et al. (2020); Watson et al. (2019); Yi et al. (2019);
however, despite the importance of the franchisee role in the franchise management
system, there is no literature review of the antecedents of franchisee performance.
Franchisees success is not guaranteed by franchise licenses even though that licensing
organization has a complex structure and high reputation (Welsh et al., 2011).
Recently, systematic review research on how making franchising work from Nijmeijer
et al. (2014) showed the five clusters for outcomes of franchising such as ownership
4
structure, business format design, contract design, the behavior of franchisor and the
franchisee and their interaction, and the age and size of the systems and its units.
However, there were also has limitations, such as disregarded the influence of general
economic and commercial factors within countries and industries and focused on
general franchise system performance.

1. Entrepreneurial orientation

Entrepreneurial orientation in business management is an interesting research area that

academic scholars have paid attention to in recent years. However, the motivation of
franchisee managers has attracted less focus in franchise literature (Rosado-Serrano &
Paul, 2018). With an excellent entrepreneurial focus, franchisee managers may
comfortably contribute to expanding franchise opportunities in international markets.
Managers may have an entrepreneurial orientation but lack the tools to grow the
franchise business. After E.O. became a dominant term in entrepreneurial literature,
researchers still paid little attention to E.O. in franchisees (Chien, 2014). E.O.
corresponds to a company competitive strategy, focused on its unique entrepreneurial
processes and attitudes, and demonstrates how businesses find and leverage potential
opportunities before their rivals (Lumpkin & Dess, 1996). Overall, franchisees E.O. is
suggested as an essential variable for the relationship between franchisor resources and
performance. A study by Colla et al. (2020) identified the most critical E.O.
dimensions for differentiating franchisees by relative efficiency. The findings
suggested that competitive aggressiveness and managerial autonomy were crucial to
achieving a high level of success for franchisees in France.

2. resources

Many of the studies reviewed are interested in franchisor resources and their essential
role in franchisee performance, exceptionally support, and brand name (Dant et al.,
2011; Gillis et al., 2014). A study by Chien (2014) stated that franchisor resources
appear to be most important in franchisees firm performance. As previous studies have
noted, training and brand name are considered intangible assets of the franchisor
Hendrikse, G.W.J, and Windsperger,J. (2004) and play a unique role in franchisee
performance. Weaven et al. (2014) found that the franchisee practical evaluation of the
franchise partnership is more highly affected by the assistance offered by franchisors .

5
Dube et al. (2020) research used LMX theory, highlighted the relationship between
leaders (franchisor) and organizational members (franchisees). It is believed that
support and perceptions of equal support can improve relationships, trust, and business
success for the whole network (Dube et al., 2020). Nevertheless, franchisor can share
the burden of increasing business visibility and profitability with a proportionate
investment of their resources (Roh & Yoon, 2009). At the same time, franchisees rely
on support, reduced start-up risk, and the promise of increased business growth (Oni,
O.A., & Matiza, T., 2014). As the “customers,” franchisees require holistic support.
For example, in addition to receiving financial and nonfinancial support, they also
appreciate minor adjustments accommodating regional or national preferences
(Hnuchek,K., Ismail,I., Haron.,H , 2013. Franchisee satisfaction on the service and
support carries a practical component, enhancing the franchisee willingness to
cooperate, minimize conflict, and promote the recruitment of new franchisees (Adeiza
et al., 2017). Gorovaia (2019) identified the main factors affecting franchise
performance: brand name; franchisees intangible resources, including innovation
capabilities and local market knowledge; exploitation assets including franchisee
know-how advantage, quality control, and administrative capabilities; and
environmental factors. Consistent with previous studies, Lafontaine et al. (2019) used
census microdata and claimed that, on average, franchised firms have higher survival
rates than independent firms due primarily to .

3. Control mechanisms s deploy various governance structures to ensure franchisees’

ongoing success, and there is no doubt that s maintain a close connection to their
franchisees’ ongoing operations. Yi et al. (2019) found output control to be a control
mechanism vital to multi-dimensional franchisee trust. According to Jacobides and
Croson (2001), monitoring in the franchising context is the gaining of information by
the to regulate franchisees’ actions and encourage franchisees to follow the franchise
agreement through behavioral output monitoring and outcome monitoring. The results
were compatible with previous studies from Kohli and Jaworski (1990); Koza and
Dant (2007). Franchisees experienced substantial job autonomy in a traditional
production management scheme since they are primarily accountable for outcomes
and controlled less in their regular activities (Dekker, 2004). Yi et al. (2019) supported
6
that s’ performance control is a primary antecedent of franchisee trust. There is proof
of the relationship between process control and franchisee trust. Several studies
believed governance was a real problem in managing franchise networks (Chiou &
Droge, 2015; Kaufmann & Dant, 1998). Research by Beldi and Karmeni (2019)
indicated that different control mechanisms affect franchisee efficiency: internal and
behavioral control on the one side and franchisee success on the other side. However,
Beldi and Karmeni (2019) identified a drawback was the lack of substantial influence
on franchisee efficiency from the interaction effect of control mechanisms.

4. Franchise ownership

Patel et al. (2018) observed that, although franchisee performance has attracted many
scholars in entrepreneurial traits, control mechanisms …, how the type of franchisee
ownership influences franchisee financial performance was under-explored. Based on
agency theory, the findings show that family-owned franchisees produce lower
financial performance than non-family-owned franchisees, highlighting the need for
family-owned franchisees to close this performance gap and for s to control
familyowned franchisees. Calderon-Monge and Huerta-Zavala (2014) questioned how
potential franchisees could understand the quality of different franchise chains, raising
two principal implications. Firstly, the moral hazard rationale for franchising may
surface in the case of conflict between company-owned establishments and franchise
operations; secondly, conflicts of interest arise between s and future franchisees if s
demand significant investments. Entrepreneurs pursuing a franchise opportunity often
look to success as a signal to regain their initial investment. Boulay et al. (2020)
suggested that to ensure a win-win relationship, and s should not allow a franchisee to
buy more than three units, as owning more units will reduce marginal revenue and
income. The optimal size is between three and four franchised outlets for a mini-chain.

5. Employees

Shan et al. (2018) reported that little understanding exists about how management
techniques impact franchisees’ success. The franchisee-level service output of
employees may rely on management strategies, and the research explores the
cumulative impact of three management techniques—creative ethos, support resources,
and autonomy—on the quality efficiency of franchisee store workers and consumer

7
satisfaction. The findings show that consumer satisfaction in a franchisee store is
positively affected by the quality efficiency and the support benefits rendered by the
store employees. Conversely, management tactics such as creative culture and
autonomy adversely affect franchisee store consumer loyalty.

Reasons for Franchising a Restaurant ( VERA L. HOOVER, DAVID J.

KETCHEN, JR., AND JAMES G. COMBS)

Franchising has long been a preferred options by many hospitality chains for their
expansion. Franchised outlets account for large portions of sales in specialty-food
Retailing (55 percent), restaurants (46 percent), and lodging (39 percent). Although the
level of franchising among hospitality firms is known, the reasons that firms choose to
grow via franchising remain under examination. Two possible explanations for the use
of franchising are chains’ limited access to capital and the close attention provided by
franchisees who are interested in preserving their own investment.

2.1.1 History of International Franchise

The first examples of franchising as a way of doing business are found in

midnineteenth century Germany, where brewers set up contracts with tavern owners to
sell their beer exclusively in the taverns. In the United States, the earliest example of
the use of franchising was not found in breweries and taverns. Instead, it occurred in
the sale of products to housewives located on the American prairie. In 1851, Isaac
Singer became the first American product name when he began to sell to traveling
independent salesmen the rights to sell his sewing machines to end users.

Although the Singer Sewing Machine Company was the earliest American product
name , it was relatively quickly outpaced by an even more important product name :
Coca-Cola. In the early 1890s, Coca-Cola chose to franchise the rights to bottle its
carbonated beverage to a large number of independent businessmen. Certainly,
CocaCola was an important early product name , but it might not have been the most
important one to begin operations at the turn of the 20th century. That distinction might
be reserved for the pioneers in the American automobile industry, which began to
franchise at that time. Both Ford and General Motors began to franchise dealerships to
independent business people to sell cars under their brand names.
8
The earliest fast food franchise was A&W Root Beer, established in 1924, with
Howard Johnson being the first to franchise restaurants in 1935. An early pioneer in
service franchising was Arthur Murray Dance Studios, which got its start in 1938. and
Franchising really took off as a form of business in the 1950s and 1960s, when many
of the current large franchise chains, businesses such as Tastee-Freez, KFC
McDonald’s, and Burger King were established. The acceleration of franchising in the
1950s and 1960s can be attributed largely to two factors: the rise of television
advertising the establishment of the national highway system.

Perhaps because of the growth of franchising in the 1960s, that decade witnessed the
formation of a flurry of fly-by-night franchise operations that established their systems,
sold them to franchisees, took the franchisees’ money, and quickly shut down. The
loss of many people’s investment in these franchises led to the beginning of franchise
regulation in the 1970s. The Federal Trade Commission (FTC) initiated its first
franchise fraud investigations in 1975. In that same year, the North American
Securities Administration drew up draft guidelines for Uniform Franchise Offering
Circulars (UFOCs), which have become the standard form for disclosing franchise
opportunities to franchisees. This growing federal effort in the 1970s also culminated
in the establishment of disclosure requirements and business rules for selling
franchises by the FTC in 1979 and the start of the regulated era of franchising. As a
result of this effort, franchising is now a regulated form of business, making an
understanding of the legal environment in which it operates important to you as a .

9
 CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Design

The research is a process which defines the objectives, manages the data and
communicates the findings occur within established frameworks and in accordance
with the established guidelines. The frameworks and guidelines provide researchers
with an indication of what to do in research and how to perform for the research.

The interpretation of data is designed to help people make sense of numerical data that
has been collected, analyzed and presented. Having a baseline method for interpreting
data will provide analysis teams a structure and consistent foundation. Several
departments have different approaches to interpret the same data while sharing the
same goal , some mismatched objectives can result. This study follow a descriptive
research design as this study follows the opportunities and challenges for franchise
restaurants in Banepa . It includes the qualitative and quantitative data.

3.1.1 Qualitative Data Interpretation

In qualitative analysis, data is not presented in numerical values but in descriptive

context. Typically narrative data is collected using different techniques such as :

a) Observation
Observation is detailing or watching a behavior or action of the people. A
researcher may spend some time , involve himself in activity and may use
different communication medium.

b) Document
Different types of documentation resources can be coded and divided based on
the type of material they contain .

c) Interviews

10
 Interview is one of the best collection method for narrative data where an
enquiry related research is done.

3.1.2 Quantitative Data Interpretation

Quantitative data interpretation analyzes the results into data and tables. The result are
usually presented numerically and by percentage in data tables . It involves the use of
statistical tools such as mean , median , standard deviation.

a) Mean
A mean represents the numerical average value of properly arranged set of
data . It can also be defined as the value which is the obtained when the sum of
all values is divided by the number of value .
b) Standard deviation
Standard deviation revels the distribution of responses around the mean. It
defines the degree of consistency within the responses .

3.2 Sources of Data

The study was done to analyze opportunities and challenges for franchise restaurants
in Banepa. For this study data is collected from two sources.

3.2.1 Primary Data

The data which is collected for the first time is called primary data . The researcher
becomes the first person to collect that specific data. For this study, data were
collected through questionnaires and interview. Certain set of question was designed
to analyze opportunities and challenges for franchise restaurants in Banepa . Both
structured and unstructured interviews were taken with owners , staffs and customers
to know the actual condition.

• Observation
• Questionnaire

3.2.2 Secondary Data

These are data which has already been collected and published by primary researcher
and can be used by other researchers. Primary data becomes secondary data when a
11
new person uses the primary data for his research and study. The main sources of
secondary data for my research were:

• Magazines
• Book
• Internet
• Literature survey

3.3 Sample Design

This research is based on purposive method. The participants were asked for few
questions and interviewed according to the topic of the research.

3.4 Population

All the people who are directly connected with franchise restaurants within the city i.e.
owners, staffs and customers were regarded as the population.

3.5 Sample Size

In this study, two owners of Nepalese franchise restaurants and 6 staffs and 45
customers were questioned and interviewed and asked to fill answer in questionnaire
for my study. Total 53 (2+6+45) people were involved in my study. 45 customers were
requested to fill up the questionnaire form. So sample size for my study was 45.

3.6 Sampling Procedure

Non profitable purposive sampling technique was used in my study. The data were
collected from the restaurant owners and staffs by contacting and meeting them and
from the customers by making them fill the answer in questionnaire through the online
medium.

3.7 Data Collection Techniques/ Tools

The structured open and closed ended questionnaire was developed and used on the
basis of objectives, research questions and review of literature which includes the
questions for the owner, staffs and customers of franchise restaurants in the city.
12
 CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

4.1 Introduction

Data analysis is defined as a process of cleaning, transforming, and modeling data to

discover useful information for business decision making. The purpose of Data
Analysis is to extract useful information from data and taking the decision based upon
the data analysis.

An imperial investigation has been conducted to find out the opportunities and
challenges for franchise restaurants in Banepa. I have used one set of opinion
questionnaire with 11 questions for the customers and survey was conducted. The
responses received from the customersm were arranged, tabulated, analyzed an
presented to facilitate the descriptive analysis.

4.2 Flow of according to customers in franchise restaurant in age

group

Group of age Frequency Valid

Percentage
5-15 5 11.10%

15-30 30 66.70%

40-45 8 17.80%

45 above 2 4.40%

Total 45 100%

13
Table 4.2 : Customers according to age group

14
4.3 Respondents’ response on degree of their visiting restaurant
Remarks Frequency Valid Percentage

Daily 3 6.70%

Once a week 14 31.10%

Twice a week 8 17.80%

Once a month 20 44.40%

Total 45 100%

Table 4.3 : degree of customers visiting restaurant

Figure 4.3 : Degree of customers visiting restaurant

15
 4.4 money spend on restaurant:

Remarks Frequency Valid Percentage

Less than 1000 13 28.90%

1000-2000 22 48.90%

More than 2000 10 22.20%

Total 45 100%
Table 4.4 : Money spend by customers

Figure 4.4 : Money spend by customers

16
4.5 Respondents’ response on guest flow during their visit:

Remarks Frequency Valid Percentage

High 11 24.40%

Medium 32 71.10%

Low 2 4.40%

Total 45 100%

Table 4.5 : Guest flow during the visit of customers

Figure 4.5 : Guest flow during the visit of customers

17
4.6 Response about price of food:

Remarks Frequency Valid Percentage

Expensive 15 33.30%

Moderate 29 64.40%

Cheap 1 2.20%

Total 45 100%
Table 4.6 : View price of the food

Figure 4 6 : View price of the food

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4.7Respondent’s responses on profile by favorite dish

Remarks Frequency Valid Percentage

Crunchy Fried Chicken 16 35.60%

MOMO 14 31.10%

Burger 5 11.10%

Others 10 22.20%

Total 45 100%
Table 4.7 : View on favourite dish

Figures 4.7 : View on favourite dish

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4.8response on Can Franchise restaurants make good business in
Banepa?

Remarks Frequency Valid Percentage

Maybe 19 42.20%

Yes 24 53.30%

No 2 4.40%

Total 45 100%

Table 4.8 : Possibility of making good business

Figure 4.8 : Possibility of making good business

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4.9 Respondent’ response on needed improvement

Remarks Frequency Valid Percentage

Training of Staff 26.70% 12

Quality of Food 26.70% 12

Service Standard 31.10% 14

Others 15.60% 7

Total 100% 45

Table 4.9 : Need of Improvement

Figure 4.9 : Need of Improvement

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4.10 Major Findings

 While analyzing the guest flow of the customers by age group in franchise
restaurant in Banepa it is found that customers between the age of 15- 25 visit the
restaurant the most. Customers who are above 45 age visit the restaurant least.

 While analyzing the responses of customers about how often they visit the
restaurant 44.4% of customers visit the restaurant once a month and 6.70% of
customers visit restaurant on daily basis.

 While analyzing the amount of money customers spend in restaurant it is found

that 28.90% of customers spend less than Rs. 1000and 22.20% of customers
spend more than Rs 2000. Most customers spend between Rs. 1000-2000.

 While analyzing the guest flow during the visit of respondents it is found that
24.40% of respondents found the high guest flow and 4.40% of respondents
found low guest flow. Most of the respondents found medium guest flow during
their visit.

 While analyzing the responses of respondents about pricing of food it was found
that 33.3% of respondents found the pricing expensive and only 2.20% of
respondents found it cheap. Most of the respondents found the pricing of food to
be medium.

 While analyzing the favorite dish of the respondents it was found that the most
preferred dish was Crunchy Fried Chicken and least preferred dish was Burger.

 While analyzing the respondents view about the essential improvement it was
found that most of the respondents wanted the improvement in service standard.

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 CHAPTER V

FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.1 Findings

Franchise business is one of the better options to be introduced in the industry.

Franchise business has an advantage of well-known brand name and already existing
brand loyal customers. So starting a franchise business can be one of the options who
seek to enter in hospitality business. Banepa is a municipality with more than 55000
people and it is the town of the Banepa town is the center point of business for not
only surrounding villages and wards but also neighboring districts like Dolakha,
Sindhupalchok, Ramechap etc. There is a good possibility of franchise restaurant in
Banepa town as there are already some Nepalese franchise restaurant. I had conducted
the survey with the customers of franchise restaurants about possibilities and
challenges for franchise restaurants in Banepa. Some of the major opportunities and
challenges of the study are as follows:

5.1.1 Opportunities

• Most of the teen aged people go to franchise restaurant in Banepa so restaurant

with teen age oriented can be introduce them in the market.
• Promotion related to young age people can be adopted by
the franchise restaurant.
• Franchise restaurant with medium priced food can introduce them in Banepa
as there will be more guest flow if prices are moderate.
• The most preferred dish by customers was Crunchy fried chicken and MOMO,
so entrepreneurs can introduce restaurant with these products.
• New entrepreneurs can introduce restaurants with better service quality and
training of the staff.

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5.1.2 Challenges

• It may be challenging to introduce franchise restaurant with moderate cost

offered for food as there is already huge investment on franchise contract.

• The amount of money the customers spend may not be enough for franchisee
to get profit within short period.
• Lack of skilled staff for the restaurant may be another challenge.
• Promotional activities for surrounding villages and wards may be required
because there is possibility of franchise restaurant only in town of the Banepa.

5.2 Recommendations

People migrating from other municipality and neighboring districts is increasing day
by day in Banepa. So the population is sure to increase in the future. There will be
increase in their demand, preferences etc. Food culture is increasing and people have
become more aware about food and beverage and dinning in a good restaurant. So
there are many opportunities for franchise restaurants in Banepa. Some of the
recommendations for investors who wish to introduce franchise restaurant and who
already owns a franchise restaurant in Banepa are as follows:

• A franchise restaurant with a moderate price range of price can be introduced.

The price shouldn’t be very high because people prefer moderate priced foods
in Banepa.
• Franchise restaurant should design the menu as per the preferences of young
people because they are the one who visit restaurants the most in Banepa at the
present time.
• Three is good opportunities for franchise with most preferred foods like
MoMo, Crunchy fried chicken etc.
• Better promotional activities like food Fest, special occasional discounts,
foods as per the festival etc. can be adopted.
• Franchise restaurants should work on training of staffs, service standard etc. to
make a good business.

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 • Customers from the age of 40/45 can also be attracted with better food choice,
better pricing of foods, family environment etc.
• Newari theme and culture can be introduced in restaurants to attract local
Newari community.
• Photography, live music etc. can be used to attract customers.
Conclusion

Franchising is a well known marketing strategy for the expansion of the business by
selling the brand name, trademark etc to the new businesses. Franchising is one of the
strong aspect for the businesses who like to start a new business because there will be
existing trademark and customers' perception on the product. So it becomes easy to
deal with the customers.

This study was conducted to know about the opportunities and challenges for
franchise restaurant in Banepa. The data analysis was done with the responses of the
customers on certain questionnaire. By analyzing those all responses I have come with
some conclusion. It may take some time to get profit if a world famous franchise
restaurants like KFC, Burger King, Pizza hut etc. is established as they have a huge
investment on the property. Most of the Respondents were ready to spend moderate
amount of money so it may take some time to make a profit. But in the future it is sure
that they will make a good business as food culture is increasing day by day and
Nepalese chain restaurants with moderate price range of food are making a good
business in Banepa. Another thing I found was the most preferred dish was MOMO
and crunchy fried chicken. So Nepalese franchise restaurant with those products can
launch their establishment in Banepa. As young age people were the one who where
visiting restaurant most, existing franchise restaurants in Banepa should focus on the
demand and supply of foods as their interest. And marketing strategies should be
applied by focusing on them. They also need to focus on the service quality and the
training of the staff to retain the customers.

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 BIBLIOGRAPHY

 https://www.franchise.org/faqs/basics/what-is-a-franchise

 https://www.investopedia.com/terms/f/franchise.asp

 https://www.toppr.com/guides/business-environment/emerging-trends-
inbusiness/franchising/

 https://www.collegenp.com/institute/banepa-municipality/

 https://www.nepal-travel-guide.com/banepa/amp/

 Thi Thao Hien Bui, Manimekalai Jambulingam & Muslim Amin | Elena
Kostadinova (Reviewing editor) (2022) A literature review of franchisee
performance: Insights for further research, Cogent Business & Management, 9:1,

26
 APPENDIXA

Survey for customers' perception about franchise restaurant

1)What is your name ?

2)Where do you live ?

3)What is your age ?

4)How often do you visit restaurant?

o Daily

o Once a week
o Twice a week
o Once a month

5) How much money do you spend in restaurant during your visit ?

o Less
than1000

o 1000- 200

6) What kind of guest flow do you see during your visit?

o High o
Medium o
Low

7) what do you think about price of food ?

o Expensive

O Moderat

o Cheap

8) what do you think about quality of food ?

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 o Excellent
o Good

o Low

9) What is your favourite dish?

o Crunchyfri
ed chicken
o MOMO
o Burger

o Others

10) Do you believe franchise restaurant can make a good business in Banepa?

o Maybe o
Yes o No

11) What type of improvement is needed?

o Training
of staff

o Quality of
food

o Service
standard

o Others

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