FACTORS INFLUENCE INTENTION TO PARTICIPATE IN
FRANCHISE INDUSTRY AS A CAREER OPTION: A STUDY ON
MALAYSIAN PUBLIC UNIVERSITY GRADUATES
NURUL ASHYKIN ABD AZIZ1 NURUL AIEN ABD AZIZ
2
NOREEN NOOR ABD AZIZ3 YUHANIS MOHAMED NOOR
4
1, 4Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan
2, 3Faculty of Business Management, UniversitiTeknologi MARA, Segamat, Johor.
ABSTRACT
This study aims to identify the factors that influence the Malaysian Public University Graduates
intention to participating in franchise industry as a career. Survey study in eight Malaysian public
universities was conducted via questionnaire by asking the level of graduates‘ intention to participate
in this study. The results indicate the factors influence graduates intention to participate in franchise
industry integrates: correlation value between attitude and intention to select franchise business as
career option = 0.780 which moderate highly significant. Next, it also illustrates correlation between
perceived behaviour control and intention to select franchise business as career option, r = 0.601
which moderate highly significant. At last but not least, result also illustrates correlation between
knowledge and graduates select franchise business as career option, r = 0.609 which moderate highly
significant. According the result that are gathered, attitude, perceived behaviour control and
knowledge shows the significant relationship between the intentions for graduates in Malaysian public
universities to select franchise business as a career option. Hence, the independent variables are
considered as the factor to intention for to select franchise business as a career option among
graduates.
Key words: Franchising, Franchise, Malaysian Graduates, Public University
1.Background of Study
According to International franchise Association website, franchising is simply a method to
expanding a business and distributes goods and services through a licensing relationship. In
franchising, franchisors whether a company or person who grants the license to a third party for
conducting a business under their marks and not only specify the products and services that will be
offered by the franchisees; a person or company who is grant the license to do business under the
trademark and trade name by the franchisor, but also provide them with an operating system, brand
and support. Based on the research done by (Chee & Bhatti, 2013) the franchising concept was
originated from United States of America, where it is the more powerful way of facilitating the
growth of services organizations.
Years by years franchising is becoming trending. It is growing very fast and outstanding,
effective and the best productive way to start-up and expand a business (Harif, Hoe, & Chin, 2014).
Malaysia itself is the third largest industrialized market economy country in Southeast Asia. With a
Gross Domestic Product that has grown at an annual rate of 6.5% for 50 straight years and a multi-
ethnic and multi-cultural population of over 30 million (75% of whom live in urban areas), the
country, not surprisingly, has attracted franchisors seeking to expand their businesses.
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In Franchise Business Review‘s industry-wide benchmark survey, 13 percent of franchisees
are between the ages of 18 and 34. Some one-in-five franchisees that launched a business in the last
two years were under the age of 30, according to newly published figures – demonstrating the
increasing popularity of franchising as a career option for young people. The results of the British
Franchise Association (BFA) and NatWest‘s Franchise Survey 2015 showed that young people were
most attracted by the guidance and support offered by established franchisors and the fact that good
quality of training offered and previous business experience to become a franchisee is not required.
In Malaysia, the Malaysian Franchise Association (MFA) was formed in 1994 to support the
implementation of the Government program to promote entrepreneurship through franchising. The
formation of MFA is indeed timely as to promote the development of franchising in Malaysia. Similar
with other developing nations, governments of Malaysian have also taken many initiatives to promote
entrepreneurship more specifically franchise business within in the country in order to create more job
opportunities especially for fresh graduates and for economic growth. In this regard, universities and
also other government institutions have to design and conduct different training programs, seminars
and workshops to promote entrepreneurship in the country.
Universities also participating in promoting entrepreneurship culture by offering different
academic courses to the graduates in order to create awareness and improve the graduate‘s
knowledge, skills and abilities to be a successful entrepreneur. Therefore, the purpose of this study is
to investigate the factor that influence graduate‘s decision to select franchise business as career option
after graduation. Here is the list of the research objectives:
To identify the relationship between attitude and intention to participate in franchise industry
as a career option among Malaysian Public University Graduates.
To identify the relationship between knowledge and intention to participate in franchise
industry as a career option among Malaysian Public University Graduates.
To identify the relationship between perceived behavioural control and intention to participate
in franchise industry as a career option among Malaysian Public University Graduates.
2. Issues of the Study
` The issue that the researcher wants to find out is about the factors that will influence
graduates from public universities to select a franchise business as a career option. Researcher finds
out that there is a lot of limitations that influence graduates to choose franchise business as the career
option. According to (Leo, 2016), it shows that 51% over 100% shows that the majority of
unemployment rate among fresh graduates are from public universities. This is because 59% of them
are poor attitude, 64% are poor in speaking English and 60% are poor in communication skills.
Besides that, it shows that the rate of unemployment rate in March 2014 is 6% compared with 2013 is
3%. In other hand, retrieved from Newhouse Syracuse University, there is 83% of graduate students
in 2014 is employ full-time after six months of graduation ("Employment Statistics ", 2016). The
fresh graduates that employ as part time worker is increases 6% in 2014 compared to previous year
2013 is 3%.In addition, retrieved from Utusan Online newspaper from ("Permodalan Nasional Berhad
need additional funds to increase promotion in franchise business," 2015), government wants to
increase an allocation of funds to Perbadanan Nasional Berhad (PNS) to create more programs and
deliver the information that are relate to franchise for entrepreneurs. Moreover, this allocation is to
carry out marketing promotions and the opportunity that being offered. Furthermore, the government
also committed to develop business by providing the opportunity and gives space to whose want to
venture franchise business. Thus, Ministry of Domestic Trade Cooperatives and Consumerism
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(KPDNKK) can increase promotions and services to entrepreneur that has additional funds from
government. There is a 44 pre-franchisor from small entrepreneur and 867 pre-franchise that is
successfully developed and have potential to become a successful entrepreneur. At the end of this
year, PNS wants to increase the number pre-franchisor and pre-franchise that is registered and help to
change business image of small entrepreneurs. Besides that, young people and fresh graduate are
encourage to venture into the franchise business and choose the franchising as the career option.
Lastly, according to previous study, a franchise business can become a career option after graduate.
So, this research is conduct to explore the factors that influencing graduates to select franchise
industry as a career option.
3. Literature Review
Franchising In Malaysia
Franchise is a business that consists of franchisor and franchisee. It using the franchisor‘s trade name
and brand name to do the business and operating their business according to format provide by the
franchisor. (Chong, 2011)According to Miranda 1995 and Justis 1995, franchising is a rapid growth of
business. It is the important and famous in create a new business. (Harif & Hoe, January
2012).According to Chiou, Hsieh and Yang (2004), they classified that the factor of communication,
support service and competitive advantage of the franchisor can affect the relationship between
franchisor and franchisee. (Harif, Hoe, & Chin, ( Exogenous Factors Dictate the Quality of
Relationship Between Franchisee and Franchisor: A Malaysian Franchising Experience), November
21-23, 2013).In 1995, they are 125 franchise systems and consists of 800 franchisees in Malaysia. But
now there consists of 268 franchise systems with more or less than 6000 franchisees. The franchise
sector in Malaysia will have a good prospect and potential to develop (Harif, 2012) By operating a
franchise business in Malaysia can improves the country‘s economic and also help the people who is
fresh graduates. This will bring the advantage to both country and also individual‘s development.
(Hoe & Hoe, 2013).The franchisee should pay the franchisor franchisee fees, royalty fees and
marketing or advertising fees (Kritz). According to Irwin (2011) if want to success in the franchising,
the most important point is to find a place that is strategic to make sure that the population of
customer is many. For example can located near the area that consists of many residents, university
graduates or the city. Nowadays the market consists of variety of franchising such as food and
beverages, education, services, beauty and health, retail etc.Malaysian Government gives fully
support to encourage people to operate franchising to develop the country‘s economic and also spirit
of entrepreneurship. (al, October 2014).In a franchising, a financial plan is important when start up a
business. This can minimize the risk of failure. It can let the franchise system more efficient. (Harif &
Hoe, The New Framework of Financial Planning: A New Franchise System versus New Venture
Business, January 2012).
Intention
According to (Weinzimmer & Nystrom, 2015), intention mostly about how that business can be
created, continued and can be changed in the organization. This is more focused about how to grow
up the business environment in the organization. In this research, it is shown that about intention
complain (Kim & Boo, 2011). Besides that, it is also related with attitude about complaints with
before complaints experience. In other hand, it says that the desire of a people for involve in the
franchise business and how intentionally create to become an entrepreneur. Furthermore, according to
(Liñán, Santos, & Fernández, 2011), it is related how an individual that have entrepreneur background
will has a potential to become an entrepreneur. The intention is about entrepreneurial skill and
knowledge that have with every person that can manage the time wisely. As an entrepreneur,
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nowadays, the internet is most important to make a promotion about the product to make customer
knows about the product or services in the market (Ismail, Jaffar, Khan, & Leng, 2012). According to
(Ribeiro Soriano, Guzmán-Alfonso, & Guzmán-Cuevas, 2012), The intention is about entrepreneurial
desire and important thing for entrepreneur to understand and know about business is an
entrepreneurial process because it is as introduction before trying to open a business in entrepreneurial
behaviour. Thus, this example show about how entrepreneurial behaviour begins to build of desire
such as behaviour and this intention is influenced by different factors. From the point of Krueger and
Kickul (2011), intention can be defines as the entrepreneur thinking and also their action. They also
agree that for the success of the entrepreneurial, the intention is very important. (Welsh & Tullar,
2013).According to Sieger et al., 2011.Many of the factors can influence the graduate‘s
entrepreneurial intention.
Attitude
According to Fishbein, the meaning of attitude was study tendency to respond to an object in a
favorable or unfavorable way (Li, 2012). Attitude is showing one‘s positive or negative performance
of behavior. Universities are always promote entrepreneurship culture by provide relevant
entrepreneurship courses to students. This will create the student‘s attitude, knowledge and talent to
improve their interest to become an entrepreneur (Chee & Bhatti, 2013).According to Barclays and
NCGE, past researchers found that the main problem that become the barrier to student is
motivational factor that affect them to open franchise business rather than only want to solve their
financial problem (Chee & Bhatti, 2013). A person that is strongly reliance on one person or no
experience in managing business like the student that is just come out from university and start
entering the journey of working can choose franchising as their career option. This is because the
franchisor will gives franchisee fully support and gives the training program for the franchisee more
than 4-6 weeks (Kritz).In the journey to success, the most important key is the franchisee‘s attitude
and the need to develop their personal capabilities. As highlighted by Singh and Magee (2001), the
student can succeed in franchising because consists of entrepreneurship education that enable them to
have an entrepreneurial thinking and can know the latest technology. (Micozzi & Micozzi, December
2014).
Perceived Behavioural Control
According to past study done by Ajzen (1998), (Kim, Ham, Yang, & Choi, 2013)(Huda, Rini,
Mardoni, & Putra, 2012) find that perceived behavioural control (PBC) is belief that ones have in
their life. PBC exist in Theory of Planned Behaviour. PBC focus on belief because it measure the
resources and opportunity that encounter especially when performing certain behaviour. it also happen
when one having difficulties in life. Besides of this, PBC also about the need of opinion when
performing the specific behaviour and evaluation for the level of importance of those resources and
chances for the achievement of outcomes. PBC or simply behavioural control means that one‘s
perceived simplicity or difficulty in performing of one‘s specific behaviour. PBC is actually reflects a
personal‘s evaluation of the ability to perform the behaviour.PBC will change by rely on the
conditions and the types of behaviours that should be perform. When the beliefs is linked with the
specific accomplishments, for example one‘s belief in expert computing skill. Then, it is called as
perceived behavioural control.PBC also have two control factors which are internal and external
constraining factors. Internal control linked with the knowledge and also self-efficacy such as skills,
capabilities, power of determination, and responsibility. While external control linked with the
environment such as time, chance, and reliability on others. It start from the subjective degree of
control over a behaviour performance when a person evaluate out how simple or hard it would be to
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conduct that behaviour. Thus, PBC is the final year students of perception of how easy or difficult to
choose franchise business as career.In the Theory of Planned Behaviour (TPB), the actual behavioural
control is linked with the capability to carry out some behaviour. In the literature, most of them will
focus on PCB which is emphasized with studying effect of PCB in Entrepreneurship intention(Matlay
et al., 2012). In the TPB also, the actual behavioural control make easy the influence of intentions on
behaviour. Then, actual behavioural control affects the perceived behavioural control. In the past
studied did by Ajzen (1991), this concept is same with Bandura‘s (1977) perceived self-efficacy,
which is ‗‗focus with judgments of how well one can implement courses of action that needed to
handle with expected situations‘‘.
Knowledge
According to Saes, Silva, de Castro Souza, and Schnaider (2011), a successful business needs to deal
with the ongoing challenges of successive generations of tacit knowledge (derived from the
monitoring of trends and investment in innovative products and services, as well as the need to make
decisions in an uncertain environment). In this situation, it is not efficient for a firm to suspend
capacity to generate knowledge for the benefit of economies of scale, leading to the decision of the
organization to combine strategy internalized and external sources. In the case of a franchise, this is
very clearly a combination of strategic, stable over time, company-owned stores and franchise units.
Yang (2013), he investigated how different the process of gaining of knowledge management and
dissemination of knowledge affect the performance of the manufacturer. In addition, knowledge-
based economic outlook and transaction costs serve as a theoretical basis. Findings from the study
reported a major and positive relationship between the process of knowledge management (KM) and
performance relationship. Based on Nawaz, Hassan, and Shaukat (2014), knowledge organization run
more effectively has gained a competitive position in an uncertain environment. Effective knowledge
management has helped the company to become an innovative organization. Firms will also get a
competitive advantage and first-mover advantages through innovation, then it has improve the
performance of the company. Process innovation relies on knowledge and knowledge management
becomes an important component in carrying out any kind of company. Knowledge management is
necessary to survive in the competitive situation and the company has to innovate to compete. After
focusing the acquisition of knowledge of the past and present, he tried to attract attention by making
the competition between the two paradigms dominate the process of knowledge, "the collection and
spread of knowledge is relatively unstructured and skills through experience, education, and access to
the literature, for example the assists by the web on the whole and encoding a principled substance
within the framework of inference logic-mathematical as supported by the semantic web "and
predicted" which is a bridge between them that would be something greater research and
development, and one with a big surprise in beyond anything that we may rational predict at this
stage."Gaines (2013)
4. Methodology
In this study, research will be conduct by using the quantitative research. According to Mark
Saunders, Philip Lewis, and Thornhill. (2007), quantitative mostly use as a synonym for any data
collection method such as questionnaires or data analysis procedures such as graphs or statistics that
emerged or use numerical data. This method purpose is to quantify data and gather up result from a
sample to the population. A set of questionnaire will be distributed to 240 students in the eight public
universities about the factors that influence graduates in Malaysia public university to select franchise
business as career option. This question will be used to gather all of the information needed regarding
the research topic in which the question will be divided into several parts that will fulfil the research
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objectives that the researcher wants to achieve and to study. Since, this research will be focusing on
the franchise business as career option, so this method is very suitable to gather the reliable
information from the students. Population is a group of potential participants to whom researcher want
to gather up the results of the study. (Salkind, 2008)In this research the researcher will choose the
final year students in public universities in Malaysia that has the faculty of business. The total
population will consist of all public universities. This population is choosing based on their intention
about the franchising business that can become as a career when finishing the study. The respondents
are students that learn in faculty business in each public university in Malaysia. The sample size is
more focusing on respondents whereas can help to analyse the result of the finding. This research
conduct to find that factors that can influence graduates to select franchise business as a career option.
Based on this research, the researcher is assuming that 240 respondents are enough to select as
respondents to answer the questionnaire. The researcher is using 8 of public universities that can
answer the questionnaires. Each of universities will answer at least 30 questionnaires. The sampling
method taking the selection of population and using the collection of data as information (Latham,
March 8, 2007). The sampling method that the researcher used is non-probability sampling. This
element does not have equal chance of being selected. It is very economical and easily performed.
The researcher choose to use the snowball sampling. At first, the researcher choose one respondents
that are conform the characteristics of the study. After getting the data from the respondent, the
researcher will ask them to pass to their friends that have the same characteristics. After finish, the
second respondents will pass to others. Then the researcher will stop once the number of respondents
is enough for the study. (Awang, 2012). The data that have collect is a set of questions that respondent
need to answers on their own. Self-completion questionnaires are best for gathering data on relatively
simple topics, and for getting a general overview of an issue.. After collecting the data, researcher will
key in the data into Statistical Packages for the Social Science (SPSS).
5. Results and Findings
Demographic Analysis of Respondents
Table 1: Demographic Analysis of Respondents
Category Frequency Percentage(%)
Gender Male 82 41.0
Female 118 59.0
Race Malay 70 35.0
Chinese 45 22.5
Indian 50 25.0
Others 35 17.5
Age 20-25 years old 115 57.5
26-35 years old 48 24.0
36-45 years old 33 16.5
>46 years old 4 2.0
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Level of Education Diploma 56 28
Bachelor‘s degree 97 48.5
Master 47 23.5
PhD 9 4.5
Field/Background Marketing/Retail 76 38
Banking/Finance 43 21.5
Management/HR 24 12.0
Operations 21 10.5
Others 36 18.0
According to table 1, it shows about the demographic analysis of respondent‘s gender where the
percentage for male category is 41% and for the female is 59%. Furthermore, for the analysis of race,
the high percentage is fall at category of Malay followed by Indian and Chinese (35%,25% and 22.5
respectively) and the lowest is others race(17.5%). On the other hand, the analysis for respondent‘s
age shows that it is about 57.5% fall at category of 20 to 25 years old, 24% for 26 to 35 years old,
16.5% for 36 to 45 years old and 2 % for more than 46 years old. Besides that, the chart also shows
about the education level of respondents where it is about 28% of the respondents is a Diploma
holder, 48.5% is a Bachelor‘s degree holder, 23.5% is Master holder and 4.5% is a PhD holder. At last
but not least is the analysis of respondent‘s field. It shows that it is about 38% of the respondents
having Marketing/Retail background, 21.5% having Banking/Finance background, 12% having
Management/Human Resources background, 10.5% having operations background and 18% is others.
Descriptive Analysis
Table 2: Descriptive Analysis
Mean Standard Deviation
Intention 4.5671 0.74533
Attitude 3.4664 0.66207
Perceived Behavioural Control 4.5571 0.68787
Knowledge 3.8213 0.57711
The descriptive analyses are the numbers which are used to provide a brief description of the
data and visualize the data. For the descriptive analysis, the researcher was making an analysis about
the mean for the dependent variables and independent variables. The highest mean is perceived
behavioural control variable which is 4.5571. The lowest mean is attitude which is 3.4664. Overall
average means for all independent variables and dependent variable is range from 3.4664 until 4.5671.
These shows that the average means for the respondent that answers this questionnaire is toward agree
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with independent variables and dependent variable. So, this all variables are contributed to this
research. In this research that conducted was used 5 scale which is 1=strongly 2=disagree, 3=neutral,
4=agree, and 5= strongly disagree. In this average mean, it shows that the average means is toward to
4 which are agreed. It range more than 3, which is respondent towards agree to this questionnaire.
Correlation Analysis
Table 3: Correlation Analysis
Variable P value
Intention 1.000
Attitude 0.780**
Perceived Behavioural Control 0. 601**
Knowledge 0. 609**
Pearson correlation defined as a test which measures the relationship between independent variables
and dependent variables. The objective of this test is whether the correlation is statically significant.
Table 3 illustrates correlation between attitude and intention to select franchise business as career
option. The index obtained on attitude factor, r = 0.780 and the p-value=0.000 which moderate highly
significant. Next, it also illustrates correlation between perceived behaviour control and intention to
select franchise business as career option. The index obtained on intention r = 0.601 and the p-
value=0.000 which moderate highly significant. At last but not least, table also illustrates correlation
between knowledge and graduates select franchise business as career option. The index obtained on
intention r = 0.609 and the p-value=0.000 which moderate highly significant.
6. Discussion
Based on the result of correlation analysis has shown that the relationship is moderate highly
significant which is Pearson Correlation 0.780 or 78% and significant value is 0.000 (p<0.05). So the
hypothesis is supported which is there are a significant relationship between attitude and intention to
select franchise as career option. This can prove that the attitude of university graduates can improved
by conduct education programs, trainings and also seminars in university. (Baum, 2004)This can
increase the intention of graduates towards the franchising. Through the learning and social
interactions with entrepreneur, the high positive attitudes can be formed. (Rae and Carswell, 2000).
Based on the result of correlation analysis has shown that the relationship is moderate highly
significant which is Pearson Correlation 0.601 or 60.1% and significant value is 0.000 (p<0.05). So
the hypothesis is supported which is there are a significant relationship between perceived behaviour
control and intention to select franchise as career option. According to past study done by Ajzen
(1998), (Kim, Ham, Yang, & Choi, 2013)(Huda, Rini, Mardoni, & Putra, 2012), PBC have two
control factors which are internal and external constraining factors. Internal control linked with the
knowledge and also self-efficacy such as skills, capabilities, power of determination, and
responsibility. While external control linked with the environment such as time, chance, and
reliability on others. It start from the subjective degree of control over a behaviour performance when
a person evaluate out how simple or hard it would be to conduct that behaviour. Thus, PBC can
explained the graduates of perception of how easy or difficult to choose franchise business as career.
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Based on the result of correlation analysis has shown that the relationship is moderate highly
significant which is Pearson Correlation 0.609 or 60.9% and significant value is 0.000 (p<0.05). So
the hypothesis is supported which is there are a significant relationship between knowledge and
intention to select franchise as career option. Based on past researchers, (Chee & Bhatti, 2013) that
know-how about famous franchise operations motivate fresh graduates to select franchise business as
career. Besides that, class room learning more specifically lecturers are play important role in order to
enhance graduates knowledge about franchise business.
6. Conclusion
As a conclusion, the factor that are influencing graduates in public universities in Malaysia to select
franchise business as career option which is attitude, perceived behaviour control and knowledge
.Then, based on the recommendations that are given in this research can help the graduates in
Malaysia that are interested in doing franchise business and can run the business very well. Based on
the reliability test that was conducted, there is excellent relationship and moderate relationship where
it is suitable for this research between independent variables and dependent variables. For the
statistical result from the descriptive analysis, the main factor that is influencing graduates as a career
option is knowledge. It means that, if the graduates want to select franchise business as a career
option, knowledge factor is the main factor that will consider. Besides that, the researcher also use a
Pearson Correlation to test the hypotheses that are built to see the relationship between independent
variables which is attitude, financial support, perceived behaviour control, knowledge and subjective
norm with dependent variable intention. According to Pearson Correlation, there is significant
relationship between independent variables with dependent variables. On the Pearson Correlation test,
it is shows that there are strong correlation and moderate correlation between two variables which is
independent variable with dependent variable. There is strong relationship between independent
variable attitudes with dependent variable intention. It shows that the strong correlation between two
variables. So, the most influence factor is attitude that is needed when choosing franchise business.
Lastly, it is concluded based on these research objectives. The research objective from this study is
the factors that are influencing graduates in public universities in Malaysia to select franchise business
as a career option. According the result that are gathered, attitude, perceived behaviour control and
knowledge shows the significant relationship between the intentions for graduates in Malaysian public
universities to select franchise business as a career option. Hence, the independent variables are
considered as the factor to intention for to select franchise business as a career option.
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