In Morocco, Franchising started in the 60’s. At the beginning, the growth rate was very low with franchising networks opening every 5 years. The first franchising networks entering the Moroccan market were car rental brands (Avis, Hertz, Europcar). Nothing surprising when we know that Morocco is a tourism place!
There are important geographical disparities in terms of franchises implantation in Morocco. From now, that is in cities like Casablanca and Rabat, two booming cities, that we can find most franchises. In 2007, we could find 12% of Moroccan franchises in Rabat, and 27% in Casablanca. However, since a few years, franchising also develops in others big cities of the kingdom: Marrakech, Agadir, Tanger. A new trend due to the building of malls helping franchises’ installation in these cities.
Among the 324 brands implanted in Morocco in 2007, most of them were European. A situation that can be easily explained by the fact that franchising is still a foreign concept. The modern economy of the country has a tendency to import everything (concepts, models, technologies, know-how, etc.) Only 14% of franchisors are Moroccan. France is number one with 47% of franchises implanted in Morocco being French. It seems that Moroccan people like French concepts, a major trend that can be explained by the geographical, linguistic and historical link that exists between both countries.
The franchising rise in Morocco.
The organized trade (franchise, concession, affiliation-commission) is a tool of development appreciated by Moroccan public institutions. The government sees in franchising a way to fight against poverty, illiteracy, and unemployment. The organized trade allows direct and indirect job creation and answer the will of Moroccan government to modernize the national economy.
Several factors explain the rise of organized trade in Morocco:
- The real progression of Morocco’s attractivity for investors since 2005 (+6% in 2006 and + 6% in 2007) to reach 52% in 2007. A growing attractivity thanks to telecommunication installations, a political stability favorable to investments, the workforce high qualifications and the foreign languages practice. (Study "Baromètre Attractivité du Maroc 2007" Ernst&Young). .
- Geographic and cultural link between Morocco and Europe, especially France.
- Growing urbanization linked to an important phenomenon of rural exodus.
- Creation of new cities at the door of big cities (Tamesna, Tamansourt…).
- The development of the big distribution through malls construction offering an adapted real-estate for franchisors.
- The rise of average Moroccan families’ revenue, loans’ democratization, and rise of credit cards use.
- The custom deregulation, reference prices suppression, an agreement signed with 26 countries on the “no double taxes”.
- The developing of new technologies of information and communication (Internet, mobile phones, TV and cable…) allowing a strong diffusion of commercials.
- The young, flexible and cheap workforce.
- The growing development of transportation and logistics structures (ex : complexe Tanger Med).
- The existence of many under-exploited activity sectors: the Moroccan market is far from being over-exploited!
- The creativity and the dynamism of certain Moroccan brands, which develop profitable and exportable concepts (Marwa franchise, Bidgil...).
For a few years, Moroccan trade has faced many changes linked to the evolution of the population consumption’s habits. These changes have helped the entry of new types of organized trade that brings a wide and diversified offer meeting the requirements of Moroccan consumers.
The obstacles of franchising in Morocco.
Many obstacles slow down the rise of franchising networks in Morocco:
Financial obstacles :
The entry fee and the royalties required by the brands, particularly foreign brands’ royalties that are too high compared to the money that Moroccan candidates have. Copied on those asked in Europe they don’t take into account the revenue differences between Morocco and European countries.
Candidates also complain about banks that are reluctant to help them financing their projects. Many banks don’t know anything about the franchising system because of the lack of communication. When the banks accept, they ask strong guarantees which all the candidates cannot always bring.
The deficit in commercial infrastructures:
Badly organized and not well adapted to the implantation of « modern boutiques », the Moroccan city-centers have difficulties to attract foreign franchisors. Spaces are rare and pricy; they cost a lot in arranging and decoration to meet the franchisor’s requirements.
Morocco also suffers from a lack of malls that are supposed to be locations searched by franchisors. Town and country planning policies don’t take into account the needs of the trade sector in terms of location, and commercial premises: there are few commercial zones, so few places to go.
Social blocking :
Despite the increase of the middle-class and the rise of the buying power, many inequalities exist and lots of Moroccan people suffer from poverty. Many of them cannot afford the products offered by the foreign brands because of the little money they earn.
In addition, for financial but also cultural reasons, many people keep on doing their shopping in the traditional boutiques of the Médina (historical center), they contribute to a dual economy.
The juridical obstacles and the lack of information:
Nowadays, there are no specific laws on franchise in Morocco, not even an established jurisprudence. In France, Doubin law fixes the limits of franchising, as the Full Disclosure Law in the US does. These laws allow preventing from franchisors proposing not very reliable concepts. Franchise in Morocco is actually framed by the Moroccan civil code called the « dahir » including the obligations and contracts code. Even though it allows the networks to benefit from a flexible juridical environment, the lack of a specific law can be risky for the franchisors and the franchisees. Indeed, in front of uncertainty, people need institutional references.
In addition, in Morocco, the lack of information and the lack of promotion of franchising is a serious problem. Candidates are not well informed on franchising and don’t get the stakes of this distribution mode. On top of that, they are not aware of, how important the respect of the concept developed by the franchisor, is.
Since the 90’s, many franchises entered Morocco in different sectors. In 2008, 342 franchising networks were set up in Morocco, while there were only 94 in 2000; it means a growth of 263% in 8 years.
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