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This study aims to study research on franchise chain performance that has focused on franchisors’ efforts to align their interests with those of franchisees to address partner uncertainty. In contrast, the question of what a franchisor should do to address another type of uncertainty and task uncertainty remains understudied. The authors suggest a franchisor’s coordination as a key means of alleviating task uncertainty and ongoing support and plural form as two mechanisms of coordination. The authors also posit that aligned interests between the franchisor and the franchisee improve, whereas one-sided interest impedes, chain performance. Furthermore, providing greater ongoing support or deploying plural form amplifies the positive effect of aligned interests on chain performance.

The authors relied on secondary data to test the hypotheses. The authors collected data for analysis from Bond’s franchisee guide and Nation’s Restaurant News restaurant database. They also tested the framework by analyzing 17-year, panel data of 71 restaurant chains operating in the USA and Canada using system generalized method of moments.

Results show that aligning interests does improve chain performance, but that the positive effect is amplified when aligned interests are matched with a chain’s provision of ongoing support or use of plural form.

The authors explicate why it is not enough to address the misaligned interests or lack of coordination alone; a chain manager needs to address both of these problems together. In addition, the authors explicate how two franchisee coordination mechanisms – ongoing support and plural form – help a chain augment the beneficial effect of aligning interests on chain performance. Without solving the twin problems of misaligned interests and coordination simultaneously, a chain is unlikely to achieve its full performance potential.

The purpose of this paper is to understand the relationship between franchisee support and brand value in micro-franchise chains. This study aims to understand the importance of value delivery in support to the micro-franchisee aiming at increasing brand value.

The sample was composed of 148 micro-franchisees belonging to 70 chains located in Brazil. The questionnaire aimed to verify the franchisee’s degree of concordance with the support and brand value provided by the franchisor through a Likert scale. The questionnaire structure comprised of ten metrics associated with franchisee support, four metrics associated with the brand value perception and four potentially intervenient metrics. A regression analysis was carried out to confirm the results for the factor analysis, assuming that the three factors associated with support as independent variables and the brand factor as a dependent variable.

The three factors related to franchisee support were found to be significant predictors of brand value. Based on the values of the coefficients, it is possible to infer the positive nature of the association. An increase in franchisee support leads to an increase in the franchisee perception about brand value. The positive effect of training and franchisor’s support in prospection and installation improvement on the brand value evaluation by franchisees was supported by the statistical analyses conducted.

This research complements the studies on brand citizenship behavior and franchisee brand commitment; the greater the support provided to the micro-franchisee, the greater its commitment to the brand values of the chain. This contribution is critical because we deal with micro-enterprises in a business environment with an intense resource scarcity. These aspects place restrictions on the delivery of support and brand value in these franchise chains.

Structured support plans and greater approximation with franchisees seem to be alternatives for this perception of value to be increased in micro-franchise chains. The attractiveness of a micro-franchise chain can be enhanced if the franchisor is able to show to its potential micro-franchisees that it offers adequate support for its business; and also for the capture of new micro-franchisees.

The social implications aimed at entrepreneurs with low financial expenditure. The sustainability of these businesses is highly relevant in the case of emerging markets given the high rates of unemployment and informality. Hence, micro-franchises become one of the means for micro-entrepreneurs to enter the job market.

When dealing with micro-franchises, there is an intensification of this scarcity of resources due to the smaller amount captured by the franchisor, as well as the lower technical level found in the franchisees. The relationship between brand value and the perceived level of support and the consequent franchise satisfaction with the chain in franchises, symbolized by brand citizenship behavior, is still little studied, and there are promising new studies, especially on the different types of franchises.

Conversion franchising is a strategy where franchisors recruit existing franchisees from rival systems or by converting independent businesses to franchisees. The present research aims to investigate the attractiveness of conversion offers and the likelihood of such offers being accepted under different conditions of the franchising agreement.

Based on commitment theory and agency theory, it is hypothesised that conversion likelihood will be larger if the conversion offer is more attractive in terms of relational benefits, relational costs, the management of control in the franchise relationship, or perception of brand strength. The study comprises a qualitative phase followed by a scenario experiment held among 415 Australian business format franchisees across six industries.

The qualitative findings reveal a predominantly calculative attitude towards the franchise relationship. The experimental findings support that relational costs and perception of brand strength are unconditional drivers of conversion likelihood; however, the effects of relational benefits and power and control depend on the details of the conversion offer. Effects of relational benefits depend on the level of power and control. More experienced franchisees and service-based franchisees are more likely to convert.

The use of experimental case scenarios limits the external validity but enhances the internal validity by allowing control for factors that are difficult to account for in survey-based approaches. The study includes only franchisees from Australia although from a range of industries. The proposed methodology can be easily modified for other contexts.

The results can help franchisors tailor conversion proposals to suit specific conversion targets based on experience and industry type. Franchisors should generally focus on developing conversion proposals that are attractive in terms of perceived brand strength and relational costs. Relational benefits and management of power and control appear to play a role only in particular circumstances. For example, when no other factors differentiate the competitor, the management of power and control can make a difference in indicating franchise support quality and level of control among franchisees.

The study extends franchising research to the franchisee perspective and to a non-American context. It utilises an experimental approach that hitherto had not been applied in franchising research, allowing rigorous testing of hypotheses about franchise behaviour. Hypotheses are tested for different industry groups.

The primary purpose of this research is to investigate franchisees' satisfaction based on franchisors' pre‐opening support, central purchasing, congeniality and ongoing business support.

The sample was drawn from ice cream franchising operations in Seoul, South Korea, and its vicinity. Personal interviews were conducted, followed by a self‐administered questionnaire.

The franchisees learned about their business opportunities through friends and relatives. The brand recognition by the consumer is the major motive for franchisees to engage in franchising. While franchisees are least satisfied with their franchisors' ongoing business support, they are most satisfied with central purchasing support from the franchisor.

The study offers valuable insights for strategic management as to recruitment, selection, and ongoing support provided by franchisors.

This research is particularly valuable to franchisors who are contemplating expanding their franchising business internationally.

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.

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.

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.

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.

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.

Retail marketing: it can be discussed in a retail marketing course to explain the growth and expansion of the retail chain and illustrate the features of a retail model that can consider franchise as a method to expand or distribute its branded merchandise in other retail outlets. The case will also help assess the financially viable growth. Marketing Management: It can be useful for a comprehensive yet straightforward explanation of marketing mix price, promotion, place, and product, also at the same time it serves to explain the importance of customer service in terms of retailing. Strategic Marketing: The case provides varied growth options that are being considered by retail organizations, which gives the student real-time opportunity to arrive at strategic decisions by considering financial viability, internal strengths (SWOT analysis), franchising as a growth option.

This case can be used in foundation course on retail marketing or even in strategic marketing in postgraduate management program, or the dilemma can be explained as a part of a marketing course for postgraduate, executive programs, management development programs.

Kanwar, the owner of 39 Bakers, was one of the fastest-growing retail outlets in Jammu, India. He had been successful in carving his pie for himself with its unique bakery products of more than 1000 variety of, break-even point price, everyday surprise product (EDSP), reasonable price, open kitchen concept, hygiene, excellent customer service. Within three years, 39 Bakers had grown from one to eight outlets, and revenue had increased to US$68,621, and vision was to achieve US$2m within the next three years. To achieve his vision, he made two business expansion plans either to start product distribution to other retailers like an FMCG company or to go ahead with the business format franchising model. The investors needed a detailed planned within three days. But Kanwar had to decide should he expand geographically and start with franchise model or shall he establish his brand with product distribution, and then go for the franchise model, which plan would make him reach his vision by 2023? Which strategy would be efficient? He indeed wanted to go for the franchise model, but the question is when?

This case will help entrepreneurs to decide on services and retail industries to expand their business and explore available growth options. It offers a platform to talk about how often franchising used to fuel growth. Either you select to be a franchisee or independent business owner or provide franchising opportunities or start your distribution network, a detailed business plan is one of the most critical decision-making activities. Without adequate details, it can make your life's most expensive option. After students have worked on the case and the task questions, the students can analyze whether a company should grow through product distribution, franchise or both; appreciate the significance of a business plan and to recognize all aspects of a retail operation, including the marketing mix; carry out strengths, weakness, opportunities, threats analysis and can develop Internal and External Factor Evaluation Matrix (IFE AND EFE); and examine various franchise options available for business expansion in a developing econ.

Position in course – This case can be used in foundation course on retail marketing or even in strategic marketing in postgraduate management program, or the dilemma can be explained as a part of a marketing course for postgraduate, executive programs and management development programs.

Teaching notes are available for educators only.

CSS: 8 Marketing.

This paper aims to explore franchisor–franchisee relationships in the context of plural forms. Plural forms implies the co-existence of franchised and non-franchised outlets of a given company. More specifically, the paper examines the impact of franchisors’ leadership styles on franchisees’ relationship commitment when the company franchised outlets co-exist with independent non-franchised outlets. Specifically, this study operationalize the plural forms phenomenon in franchising, using multi-channel complexity as a moderator. The mediating role of relational capital is also examined.

Data were collected from 254 franchisees. The hypothesized model was tested using partial least squares structural equation modeling (PLS-SEM).

The results indicate that all three – participative, supportive and directive leadership styles of franchisors increase relationship commitment. In a high channel complexity context, a supportive leadership style is the most effective, whereas, in a low channel complexity context, a participative style is the most effective. Relational capital also partially mediated the relationships between leadership styles and relationship commitment.

Franchisors should follow a participative leadership style when channel complexity is low. However, as they add new channels and the channel complexity increases, franchisors should shift toward a supportive leadership style to maintain existing franchisees’ commitment. In current environments, managers should avoid using directive leadership in favor of the other two leadership styles.

The present study is the first to examine the influence of channel leadership style on relationship commitment in an environment of multiple channel complexity.

The purpose of this paper is to assess the conceptual relationship between the running royalty programs and the performance of a franchisee or franchisor. Thus, this paper will analyze the correlation of financial stability when the franchisor strengthens the running royalty policy at aspect of franchisor.

A model is presented and designed. The paper will analyze the causality which is affected by strengthening the profit structure with the running royalty program and also find out how the strengthened profit structure will affect and improve the franchisors' sustainable supports for the franchisees, service quality and service satisfactions.

Although the franchise industry is growing in Korea, the stability of business is still in doubt because the business cycle of the franchisor is shortened. This paper found the reasons why franchisors have unstable status in Korea. The main reason was the instability of profit structures for franchisors which are a burden to the franchisees which then worsen the franchisors' financial status. The biggest different from the US franchise industry was the running royalty program. So, this paper will apply the running royalty program politically to the franchise business in Korea and find out how it will affect the overall business cycle.

This study was limited to the Korean franchise industry and found out the factors which influence the franchisors' performance in various aspects. By analyzing with casual loop diagram, this paper found how each of the factors interact and bring out the positive feedback process. Also, it suggests a way of adopting the running royalty program into the Korean market.

This paper aims to evaluate the antecedents of franchise relationship development from the perspective of a sample of Chinese and Turkish franchisees.

This study explores relationship development through semi-structured interviews with Chinese and Turkish franchisees.

The findings of the study demonstrated that both the culturally adapted role performance of franchisors and communication geared towards knowledge transfer contribute to relationship development with franchisees.

This exploratory study evaluated the influence of role performance and communication as factors influencing relationship development. Further research could explore other factors in other countries and industries.

To build and develop long-term relationships with franchisees, franchisors need to invest in continuously improving their franchise infrastructures and enhancing their brand reputations. Communication and knowledge transfer between the franchisors and the franchisees are crucial for the management of dynamic relationships.

This paper advances franchising literature by offering a combined and complementary theoretical perspective to our understanding of the influence of power and social investments in relationship development between franchisees and franchisors. In particular, the study identifies role performance of franchisor and communication with franchisees as the key antecedents of relationship development.