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1 – 10 of over 5000Vitor F.C. Goncalves and Maria Margarida M.
Portugal has been considered a peripheral market by internationalfranchisors owing to the small market size and, in some cases, thegeographical and cultural distance. However, as…
Abstract
Portugal has been considered a peripheral market by international franchisors owing to the small market size and, in some cases, the geographical and cultural distance. However, as a reflex of the global trends in franchising, the last decade has witnessed the expansion of networks and the entry of many new foreign operators in Portugal. The presence of international franchise systems is dominant, but a small number of local concepts was developed and some have already started international operations. Reports the results of an empirical study that purported to identify and assess the methods of penetration in Portugal used by foreign participants; the proceedings for implementation of franchise systems at national level; participants′ opinions on major problems encountered in establishing the franchise system in Portugal; the opinion of participants about the performance and prospects of evolution; and the characteristics of international operations of national franchise systems and prospects for expansion.
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Maria Jell-Ojobor and Josef Windsperger
The governance structure of international franchise firms varies from higher control modes, such as wholly owned subsidiaries and joint venture franchising, to lower control…
Abstract
Purpose
The governance structure of international franchise firms varies from higher control modes, such as wholly owned subsidiaries and joint venture franchising, to lower control modes, such as area development and master franchising. Based on organizational economics, strategic management, and international business perspectives, the purpose of this paper is to use the case study analysis to empirically evaluate an integrative model on the franchisor’s choice of international governance modes.
Design/methodology/approach
The study applies qualitative methods, such as in-depth case analysis, to investigate a large set of variables that influence the governance structure decision of the international franchise firm. Specifically, it applies a theory-testing case study with two major competitors in the European automotive rental industry, i.e. Europcar and Sixt. Theory-testing case research is justified by the lack of explanatory research due to the complexity of the franchisor-franchisee relationship phenomena, such as the factors that influence the franchisor’s choice of international governance modes. The investigation of the complex governance structure phenomenon requires a holistic analysis.
Findings
The case study shows that environmental, behavioral, transaction-specific, resource-based (system-specific, market-specific, financial resources), and international strategy considerations are important determinants of the governance mode decision of the international franchise firm.
Research limitations/implications
The study responds to the recent call in organizational economics, marketing, strategic management, and international business literature to develop and test a multi-theoretical framework to explain the governance structure of inter-organizational networks, such as franchise networks.
Originality/value
Few previous studies in international franchising have used more than one theoretical perspective to explain the governance structure of the international franchise firm. This study contributes to the theory-testing case study literature by applying a rigorous method of conducting case research. This includes developing a theoretical framework and a systematic research design. A systematic research design requires a holistic analysis by investigating the international franchise governance modes from a variety of theoretical perspectives which are the organizational economics, strategic management, and the strategy-structure perspective.
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Although research in franchising is currently experiencing an advancement in the investigation of behavioural attributes, the motivators and perceptions of participants within…
Abstract
Purpose
Although research in franchising is currently experiencing an advancement in the investigation of behavioural attributes, the motivators and perceptions of participants within this partnership, the key variables of trust and commitment, a key to successful business relations, requires further insight. The purpose of this paper is to extend the idiosyncratic dynamics of the franchisor‐franchisee relationship and the influence of such constructs from a distance perspective. Seminal work on relationship marketing (Morgan and Hunt) forms the foundation in the development of the franchising relational dynamics model posed within this paper.
Design/methodology/approach
This paper adopts a qualitative, case‐based approach of four Australian retail franchises with holdings in New Zealand. In‐depth interviews were conducted with 20 franchisees to derive perceptions on trust and commitment currently experienced within the franchise relationship to inform the resultant findings.
Findings
Key findings suggest trust and commitment are limited or non‐existent within franchise systems if the provision of consistent, transparent communication is absent or minimal, increasing the propensity for dysfunctional agent‐based behaviour. Three major antecedents for success of a franchise system exist: goal congruence, organisational culture, and communication. Minimal levels of commitment and trust exist where distance affects the stated antecedents.
Research limitations/implications
This research is exploratory with the findings providing an imperative for further investigation in the management of human factors within franchise systems as opposed to transactional‐based foci in many current studies. Theoretical development adopting a relationship marketing focus from a distance perspective rather than the transaction‐based approach of a single country adds to existing research. This paper is limited to analysis of franchisees' perceptions. Future research should look at both franchisor and franchisee perspectives.
Originality/value
Research of perceptions of individual franchisees, trust and commitment within the franchise relationship is limited within the Asia‐Pacific region. Findings of possible dynamic differences in the franchisor/franchisee dyad provide initial evidence advancing and informing both academic and managerial practice.
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Victoria Bordonaba‐Juste, Laura Lucia‐Palacios and Yolanda Polo‐Redondo
Research on franchise system survival has focused on analyzing organizational failure. However, there are two types of market exit: organizational failure and franchise…
Abstract
Purpose
Research on franchise system survival has focused on analyzing organizational failure. However, there are two types of market exit: organizational failure and franchise discontinuance, but little research has distinguished between the two. The purpose of this study is to examine whether different factors explain these types of exit. Apart from the common factors included in previous research (age, size, upfront fee, royalty rate and ownership structure), this paper aims to add system growth and its interaction with age and size.
Design/methodology/approach
The paper uses data about franchise systems in Spain from 1986 to 2004 from the catering and fashion sectors and applies the Cox survival model to test the hypotheses.
Findings
The paper finds that system growth rates and system size only influence franchise discontinuance. Both the youngest and the oldest firms show the lowest risk of discontinuing franchising. The results are similar to those found in previous research that uses the two types of market exit as synonymous.
Research limitations/implications
The article findings suggest that it is important to define franchise survival.
Practical implications
This research identifies what franchisors can do to continue in the market. An important result is that young and small franchisors should grow at a moderate rate. They should learn first how to manage a few units before becoming a large network.
Originality/value
This research examines the differences between two types of market exit (organizational failure and franchise discontinuance) and their drivers from the franchisor's perspective. This research contributes to the franchising literature by analyzing the effect of growth on survival. Additionally, the moderating effect of size and age on growth on the two types of market exits is included.
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Anthony Richard Grace, Lorelle Frazer, Scott K. Weaven and Rajiv P Dant
– The purpose of this research is to identify the critical determinants of a franchisee’s trust in their franchisor.
Abstract
Purpose
The purpose of this research is to identify the critical determinants of a franchisee’s trust in their franchisor.
Design/methodology/approach
A qualitative approach was used, and 30 interviews were conducted with franchising participants. The first phase of the research consisted of exploratory interviews with franchising experts (franchise lawyers, accountants, consultants, mediators and bankers), and the second phase consisted of semi-structured interviews with franchisees and franchisors across two franchise systems.
Findings
The research revealed five critical determinants of a franchisee’s trust in their franchisor: franchisee’s engagement in the system, franchisee’s confidence in the system, franchisee’s perception of a strong team culture, franchisee’s perception of franchisor competence and franchisee’s perception of franchisor character.
Practical implications
The research provides insight into how the aforementioned components can be developed within a franchise system to build franchisee trust. The paper also concludes with four practical recommendations that can be integrated within a franchise system to increase levels of franchisee trust.
Originality/value
This research builds on prior research into franchisee trust, providing an original contribution to the literature through the development of a practical model, showcasing critical determinants of a franchisee’s trust in their franchisor.
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Kunsoon Park, Seungwon “Shawn” Lee and Mahmood A. Khan
The purpose of this paper is twofold: to investigate the impact of franchisor support on quick service restaurant (QSR) users’ intranet acceptance; and to examine the technology…
Abstract
Purpose
The purpose of this paper is twofold: to investigate the impact of franchisor support on quick service restaurant (QSR) users’ intranet acceptance; and to examine the technology acceptance model (TAM) to explain QSR users’ attitude toward the franchise intranet usage. Franchisors are building intranet systems as a communication tool to assist their franchisees in performing their jobs better. However, there is a little available literature that discusses in detail the use of the intranet by franchise systems.
Design/methodology/approach
This study adopted the TAM to investigate the acceptance of the intranet in the context of QSR franchise systems. The original TAM was modified to include an external variable, franchise support. A total of 161 returned and completed responses were examined. Descriptive analysis, validity, principal component factor analysis and regression analysis were used to estimate the relationships between constructs.
Findings
The key finding of this study is that franchise support is a key in the decision for users to use intranet systems in the QSR franchise systems. This study also confirmed that there are positive and significant relationships among key variables: franchise support, perceived usefulness of intranet, perceived ease of use of intranet, attitude toward using intranet and behavioral intentions to use intranet. Regression analysis revealed that TAM is a valid model in predicting intranet adoption in restaurant franchise systems.
Originality/value
This study pursued franchise support, which was not included in the original TAM, to see how it affects perceived ease of use, perceived usefulness and intention to use. In addition, a list of recommendations for improving the situation in that franchise organization is provided.
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John E. Clarkin and Robert B. Hasbrouck
The purpose of this research is to explore the objectivity and reliability of Entrepreneur Magazine's Franchise 500® ranking system.
Abstract
Purpose
The purpose of this research is to explore the objectivity and reliability of Entrepreneur Magazine's Franchise 500® ranking system.
Design/methodology/approach
Using data from 1997 to 2004 rankings, regression analysis was used to determine the extent to which key variables explained the rank of franchise firms.
Findings
Several quantifiable measures, categorized by the publishers as “most important” or “important” to a firm's rankings, were found to have little or no explanatory power in the regression model. Longitudinal analysis revealed inconsistencies in the ranking among the top 100 ranked franchises, which question the ranking system's reliability.
Research limitations/implications
Only a subset of the variables used to calculate the rankings are disclosed by the publisher, yet these variables explain a substantial portion of any given franchise's rank. Only the top 100 ranked firms were included in the study.
Practical implications
While considered to be important to a firm's rank, the amount of pending litigation and the percentage of terminations within the system, found to be indicators of conflict between franchisor and franchisees, appear to have little effect on a franchise's rank. Also, size of the franchise system appears to have a strong but inconsistent relationship with rank, both within any given year and over the time period covered by this study. Lastly, the relationship between growth rate and rank, another factor considered by the publisher to be most important, also appears inconsistent, both in terms of number of outlets added and percentage of growth attained over the previous year.
Originality/value
Due to the wide popularity of the ranking system by practitioners and researchers a more systematic examination of the ranking appears justified to understand the underlying research implications of franchising research as it relates to the Franchise 500.
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Yolanda Polo‐Redondo, Victoria Bordonaba‐Juste and Laura Lucia Palacios
The purpose of this paper is to examine three strategic decisions that determine firm size in the franchise distribution system: price policy, the timing decision, and network…
Abstract
Purpose
The purpose of this paper is to examine three strategic decisions that determine firm size in the franchise distribution system: price policy, the timing decision, and network ownership.
Design/methodology/approach
The paper uses data covering 384 franchise chains operating in the catering and fashion retailing sectors for an 18‐year period (from 1986 to 2004). The panel data methodology is applied.
Findings
The paper finds that the pricing policy and the ownership structure can be used to attract new franchisees and it also finds empirical evidence of the advantages of early followers. Some differences are found between the two sectors analysed. Additionally, it finds evidence of the use of different strategies by mature and young franchise chains.
Research limitations/implications
The focus is only on the fashion and catering sectors in the franchise industry. Although they are the two most important sectors in the Spanish market, this limitation provides researchers with interesting possibilities for further research in other countries and in other sectors.
Practical implications
The results may help franchisors to know which strategies can increase their system size. First, franchisors should focus on minimizing their control of the network strategy. Second, franchisors should increase the franchise fee and the royalties as the chain matures to expand their system size. Third, managers who are planning to begin to franchise their businesses should decide to enter at the growth stage of the franchise market in order to achieve greater advantages.
Originality/value
This paper highlights the importance of the price strategy and of the entry timing decision in the franchising context in countries where the franchise system is still developing.
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The purpose of this study is to examine the effects of fairness on relationship quality and re-contract intention in the foodservice franchise industry and this paper intends to…
Abstract
Purpose
The purpose of this study is to examine the effects of fairness on relationship quality and re-contract intention in the foodservice franchise industry and this paper intends to delineate the implications of enhancing the mutual relationship between the franchisor and the franchisee in the future domestic foodservice franchise system.
Design/methodology/approach
To prevent the lack of reliability and to pursue the internal consistency of the measurement model, this study adopted SPSS (Ver.20.0) and derived Cronbach’s alpha. Additionally, this study conducted a confirmatory factor analysis by using AMOS (Ver.20.0) program to assess the unidimensionality of measurements. Finally, structural equation modeling was used to test the hypothesized research framework.
Findings
The results showed that distributive fairness and informational fairness increase the relationship quality, which franchisees perceive under the franchise system. Among the relationship quality factor, only the trust has a considerable impact on the (performance) re-contract intention. The effect of fairness on relationship quality does not show a statistically considerable difference between the two groups (global franchise vs domestic franchise). However, in terms of a global franchise, distributive fairness has a significant impact on relationship quality, whereas domestic franchise, distributive fairness directly affects performance (re-contract intention).
Research limitations/implications
This study provides readers with an effect of fairness in the franchise system. Results obtained in this study are useful for understanding the fairness and relationship quality in the franchise system.
Practical implications
Recently, as the foodservice franchise market is experiencing significant growth, government and franchise-related agencies are making considerable effort to improve the relationship between the franchisor and the franchisee and to offer a better system and policy concerning the protection of consumers. Government and franchise agencies should develop an adequate policy to improve the relationship between the franchisor and the franchisee by breaking away from the imprudent support.
Originality/value
This study investigates whether fairness in the franchise system has a significant effect on the relationship quality and the performance (re-contract intention) and provides implication about the mutual growth between franchisor and franchisee to the potential food service franchise in Korea.
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