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Article
Publication date: 10 June 2014

Shih-Yi Chien

Franchise outlets owned by entrepreneurial married couples are gradually increasing. Based upon prior research in resource-based view, entrepreneurial orientation (EO)…

Abstract

Purpose

Franchise outlets owned by entrepreneurial married couples are gradually increasing. Based upon prior research in resource-based view, entrepreneurial orientation (EO), franchising, and family business, the purpose of this paper is to analyze franchisor resources, spousal resources, and EO are critical to the development of franchisees’ performance.

Design/methodology/approach

–The author conducted a survey of 99 franchisees in couple-owned convenience store franchise outlets in Taiwan using the partial least squares technique.

Findings

It was found that franchisor resources, spousal resources, and EO directly affect franchisee performance. In addition, franchisor resources also have an indirect effect on performance through EO, but spousal resources do not have an indirect effect.

Practical implications

The franchisor should pay attention to the development of their resources and a franchisee's EO and the interaction between the franchisee and the spouse. Furthermore, a franchisee's EO facilitates the manipulation of the franchisor's resources.

Originality/value

This study highlights the possession of franchisor and spousal resources, and the importance of EO to foster and develop the franchisee performance in a couple-owned franchise outlet. These findings also suggest that franchisor resources have indirect effect on performance through EO.

Details

Management Decision, vol. 52 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 8 February 2013

Seng‐Su Tsang and Carol A. Finnegan

This study provides a robust test of a central question in franchising: which factors influence the timing of adopting the first franchised outlet? Using a novel methodology, the…

1280

Abstract

Purpose

This study provides a robust test of a central question in franchising: which factors influence the timing of adopting the first franchised outlet? Using a novel methodology, the purpose of this study is to examine the factors that accelerated or delayed the opening of the first franchisee outlet for the largest franchise chains in the USA.

Design/methodology/approach

The sample addresses a methodological shortcoming in traditional franchising literature. Using duration analysis, the paper captures the timing of the first franchise outlet for a retail concept. This allows us to capture the antecedents that explain the differences in timing between franchise systems.

Findings

By setting initial investment costs lower, the average time to attract the first franchisee is shorter. However, as franchisee net worth requirements rise, the time to attract the first franchisee is longer. Finally, franchisors tend to defer expansion via franchising in favor of managing their own outlets in resource rich industries.

Research limitations/implications

The dataset is limited to the largest US franchise systems.

Practical implications

This study suggests factors that would cause franchisors to decelerate or accelerate the initial franchise timing decision. Businesses time expansion based on industry size, outlet start‐up costs, and franchisee net worth.

Originality/value

This study provides the first examination of the firm and industry drivers affecting when a firm initiates franchising. This study uses rigorous empirical testing of franchising theoretical predictions using duration analysis.

Details

International Journal of Retail & Distribution Management, vol. 41 no. 2
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 21 December 2020

Richard Hoffman, Sharon Watson and Hemant Kher

This study aims to provide an empirical test of an existing theoretical model depicting the governance modes used by international franchisors when entering international markets.

Abstract

Purpose

This study aims to provide an empirical test of an existing theoretical model depicting the governance modes used by international franchisors when entering international markets.

Design/methodology/approach

Using a unique panel data set of 222 market expansions by US firms over a seven-year period, this paper tests hypotheses regarding the factors affecting the franchisors’ choice of governance modes when entering foreign markets.

Findings

Franchisors use governance modes with lower levels of control when faced with environmental uncertainties due to corruption, economic downturns and when the geographic distance is large. Moreover, the franchise system assets and its local market assets also affect the choice of governance modes.

Practical implications

Firms need to balance the costs of environmental uncertainty with the need to safeguard the firm’s capabilities and resources using governance modes with appropriate levels of control. This balance changes as the franchise company gains more experience in the local market and as once-emerging markets continue to develop.

Originality/value

This research identified additional governance modes used by franchisors compared to previous studies. Using multiple theoretical perspectives, the study supported significant portions of the Jell-Ojobor and Windsperger (2014) model of franchisor governance mode choice.

Article
Publication date: 19 August 2022

Gowsia Shah and Natasha Saqib

This study aims to develop an instrument that examines the franchisor as an entrepreneurial form. Although examining the entrepreneurial tendencies of the franchisors has been a…

Abstract

Purpose

This study aims to develop an instrument that examines the franchisor as an entrepreneurial form. Although examining the entrepreneurial tendencies of the franchisors has been a central goal of the present research, the study also uncovers the factors that lead firms to offer franchises and promote franchisor growth.

Design/methodology/approach

Data was collected from the population of franchisor organizations in India by following a survey approach. Statistical techniques including descriptive and inferential statistics like correlation and structural equation modeling were used to analyze the data.

Findings

The study results show that franchisors possess entrepreneurship traits and reveal entrepreneurial behavior. The study also provides empirical evidence toward various dimensions that contribute to franchisor growth.

Research limitations/implications

The results of the present study propose research implications toward clarification of the entrepreneurial position of the franchisors in the extensively unclear research area.

Originality/value

Considerable ambiguity surrounds franchisors’ activities running and managing their business as entrepreneurial firms. By indicating franchisors’ entrepreneurial traits, the study expatiates on major franchising and entrepreneurship literature arguments.

Details

International Journal of Innovation Science, vol. 15 no. 3
Type: Research Article
ISSN: 1757-2223

Keywords

Article
Publication date: 9 October 2007

Stephen Choo, Tim Mazzarol and Geoff Soutar

Although international franchising has occurred in East Asia over the past 20 years, surprisingly very little academic research has been undertaken to understand key dynamics of…

4204

Abstract

Purpose

Although international franchising has occurred in East Asia over the past 20 years, surprisingly very little academic research has been undertaken to understand key dynamics of this marketing phenomenon. The purpose of this paper is to examine franchise resources, which is a key construct in the internationalization of retail franchising.

Design/methodology/approach

A multiple case study approach has been adopted to generate rich data designed to aid understanding of the complexities inherent within such an international marketing relationship. The data were drawn from five US food service retail franchises, which are household brands across East Asia, operating in Singapore.

Findings

This study presents several interesting findings for the retail franchise industry. First, consistent with resource scarcity theory, international franchising relationship begins with a high degree of franchise dependency on the local franchisees. Next, international franchisors will be well served to select their overseas franchisees with strong financial resources to engage in rapid expansion, good contacts to secure early stores in prime retail locations and well‐proven local knowledge to modify the concept to suit particular market needs.

Practical implications

Findings from this study have important managerial implications for international retail franchisors on how to effectively select franchisees to successfully launch and manage their brands in East Asia.

Originality/value

This empirical study has made a major contribution in adding to the limited body of empirical knowledge on franchisee selection in international retail franchising, particularly in East Asia. It is hoped that this paper will encourage more academics to investigate why certain international retail franchise concepts perform relatively better in East Asia than others.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 19 no. 4
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 5 May 2020

Jamal T. Maalouf, James Combs, William E. Gillis and Alexa Perryman

The purpose of this paper is to introduce strategy as a factor that explains when franchisors – through the franchisees they select – seek to replicate routines exactly versus…

Abstract

Purpose

The purpose of this paper is to introduce strategy as a factor that explains when franchisors – through the franchisees they select – seek to replicate routines exactly versus allow local adaptation of routines.

Design/methodology/approach

Combined archival and survey data from 248 US and Canadian franchisors actively seeking franchisees were used to test hypotheses via structural equation modeling. The robustness of results was comprehensively explored.

Findings

As hypothesized, results suggest that franchisors pursuing plural form strategies select franchisees with traits that foster replication, such as prior managerial experience and the desire to become multi-outlet franchisees. Those franchisors pursuing turnkey strategies seek franchisees who exhibit a willingness to experiment and adapt. In contrast to expectations, plural form franchisors were more likely to seek franchisees with local market knowledge.

Originality/value

Strategy influences whether franchisors select franchisees who will replicate versus adapt organizational routines. The authors introduce strategy as a factor affecting the extent to which routines are replicated exactly versus adapted locally. For franchising research, they challenge prior theory by explaining why franchisors invest in franchisee selection rather than waiting for the best franchisees to self-select into franchising.

Details

Journal of Knowledge Management, vol. 24 no. 4
Type: Research Article
ISSN: 1367-3270

Keywords

Article
Publication date: 8 September 2021

Mrigakshi Das

The Indian power distribution companies are increasingly recognizing franchising for reviving their high loss-making rural pockets. The motivation for franchising has been a…

Abstract

Purpose

The Indian power distribution companies are increasingly recognizing franchising for reviving their high loss-making rural pockets. The motivation for franchising has been a reduction of the franchisor's resource scarcity by bringing in operational efficiency and improved service quality to end consumers. However, there is a dearth of evidence on the influence of the franchisee's operations in addressing the resource scarcity of franchisors in predominantly rural areas. This study contributes towards filling the research gap.

Design/methodology/approach

A qualitative embedded multiple case study was conducted. The cases comprised two rural franchisees operating towards attaining the common goal. The study was built on archival analysis, personal observations and semi-structured interviews with the franchisors and franchisee officials across the organization's hierarchical levels. A conceptual model based on the review of prior literature formed the initial set of coding for the study. The data were presented based on within-case and across-case analysis.

Findings

The analysis revealed that the contract design impacts the requisite operational efficiency achievement. This variation could be elaborated by factors, such as system adaptation across organizational hierarchy, autonomy and independence, review and feedback systems, monitoring, a professional's attitude, bureaucracy, adaption with the local areas, risk sharing, incentives and compensation structure.

Research limitations/implications

The study findings could be generalized to the extent of similar socio-economic conditions, prevailing governance mechanisms and law and orders. Additionally, since the law does not mandate the regulatory commissions to scrutinize the performance of the franchisees, the study was built on data shared by the franchisees and the discom. Further, this study considered the performance of only two performing franchisees. Matching these actualities with the discoveries of this study remains a continuing project as participation of private players is increasingly being recognized. Therefore, the insights drawn from this study could be used to improve the franchise model and can be scaled up across the nation, regions and sectors.

Originality/value

There is a dearth of literature on franchising in electricity distribution. This study is one of the first studies on studying the franchise system in the electricity distribution sector through the application of a well-accepted management theory.

Details

Journal of Economic and Administrative Sciences, vol. 39 no. 4
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 23 November 2018

Enrico Colla, Maria Eugenia Ruiz-Molina, Catherine Chastenet De Gery, Maryline Schultz, Martine Deparis and Laurence Lemmet

The purpose of this paper is to investigate the impact of participative franchising on performance from the franchisee perspective. In particular, the paper analyses the impact of…

Abstract

Purpose

The purpose of this paper is to investigate the impact of participative franchising on performance from the franchisee perspective. In particular, the paper analyses the impact of the franchisee autonomy – in human resource management and marketing decisions – affective commitment to the network and network innovativeness on the franchisee relative performance.

Design/methodology/approach

A survey answered by 226 franchisees in France allowed to estimate a structural equations model through partial least squares regression analysis to test the hypothesised relations between autonomy, affective commitment, innovativeness and performance.

Findings

According to the authors’ findings, franchisee’s autonomy in commercial policies, mediated by to franchisor’s ability to innovate and acknowledge innovations stemming from the franchisees, and the affective commitment to the network, emerge as strong determinants of the franchisee’s performance.

Research limitations/implications

The results confirm the conclusions of other research, but extend and integrate them, providing evidence that the role of participative franchising should not be neglected.

Practical implications

The results obtained provide evidence about the importance of bidirectional communication instruments in the relations between franchisor and franchisee, and participation tools for the identification, recognition and support to the innovative successful practices developed by franchisees to be quickly implemented by other franchisees in the network.

Originality/value

This paper looks at franchisee autonomy, affective commitment and innovativeness as potential determinants of franchisee’s performance, being the latter an underexplored topic.

Details

International Journal of Retail & Distribution Management, vol. 47 no. 7
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 13 May 2019

Alexander Rosado-Serrano, Teresa Longobardi and Justin Paul

The purpose of this paper is to examine whether operating countries influence restaurant franchising system performance and what would be an optimal international franchise…

Abstract

Purpose

The purpose of this paper is to examine whether operating countries influence restaurant franchising system performance and what would be an optimal international franchise proportion.

Design/methodology/approach

The authors observed ten publicly traded franchise firms that operated between 1995 and 2015. Data analysis is conducted through a generalized linear model (GLM) of panel data.

Findings

The model confirms a curvilinear U-shaped relationship between international franchise expansion and firm performance, similar to domestic franchising. The authors found that international franchisors have a higher optimal franchise proportion than domestic franchisors. The authors did not find that operating countries influence firm performance.

Originality/value

This study contributes to franchising literature by expanding limited empirical studies on international franchising. It provides practitioners with a new optimal franchise proportion at the international level.

Details

International Journal of Retail & Distribution Management, vol. 47 no. 7
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 24 September 2018

Nabil Ghantous and Shobha S. Das

The purpose of this paper is to investigate international franchise performance. It focuses on how franchisors conceive their international performance, the drivers of their…

1293

Abstract

Purpose

The purpose of this paper is to investigate international franchise performance. It focuses on how franchisors conceive their international performance, the drivers of their international performance, and how age-at-entry moderates the impact of their resources and capabilities (R&C) on international performance.

Design/methodology/approach

Using the lens of the resource-based view of the firm, the authors build on franchisor voice from a qualitative study (n=28) to propose a research model of international franchise performance. A second, quantitative study (n=89) tests the model with PLS structural equation modeling.

Findings

Franchisors view international performance in terms of relationship satisfaction with foreign franchisees and performance in comparison to competitors. The empirical results show that relationship satisfaction significantly improves comparative performance. Both franchisor-owned resources, the brand and knowhow, enhance only comparative performance, while all three international relational capabilities, related to knowhow transfer, monitoring, and contract design, and both reconfigurational capabilities, related to organizational responsiveness and innovativeness, improve relationship satisfaction. Only contract design and innovativeness increase comparative performance. Finally, late internationalization reinforces franchisor ability to leverage relational and reconfigurational capabilities for better relationship satisfaction.

Originality/value

This paper contributes to research on international franchise performance. It uses a mixed-method design and offers the first quantitative investigation of the drivers of international franchise performance. This research also integrates the role of franchisor R&C with franchisor strategic choices, through the moderating effect of internationalization timing.

Details

International Journal of Retail & Distribution Management, vol. 46 no. 8
Type: Research Article
ISSN: 0959-0552

Keywords

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