How France's Potential Franchisees Reach Their Decisions: A Comparison with Franchisers’ Perceptions

Abstract

Journal of Small Business Management 2004 42(2), pp. 218-224 Hing (1997) takes up the subject of franchise publications, already raised by Elango and Fried (1997): literature of franchising contained a plethora of repetitive and journalistic material, which contained conflicting and unsubstantiated claims (p. 157). Many publications point to the important role of the franchisee in the success of a franchise network (Jambulingam and Nevin 1999). Paradoxically, few empirical researchers have tried to understand their motivation, although several researchers stressed the importance of it. For instance, although Stanworth and Kaufmann (1996); Bradach and Kaufmann (1988); and Anderson, Clarence, and Dunkelberg (1992) emphasized the area of past experience that would indicate which individuals likely were to be interested in becoming franchisees, this topic has not been studied in detail. Peterson and Dant (1990) also suggest that it is important to observe franchisees' motivations and decision-making processes prior to their actually joining a system. The present study attempts to reach a better understanding of how the potential franchisees come to their decisions and attempts to compare this process with franchisers' perceptions. It initially focuses on the identification and on the decision-making process of French potential franchisees; subsequently, applicants' answers are compared with those of the franchisers. Data were gathered at the annual franchise show, the Salon de la Franchise, held in Paris. Gap theory explains how differences from expectations between the service provider (the franchiser) and the customer (the potential franchisee) can affect the perceived quality of the franchise package. Managerial implications and future research needs are discussed. Methodology Sample Kaufmann and Stanworth (1995) note that the aim is to find a sample large enough to permit generalizations about the population of prospective franchisees. One possibility is to interview those attending a franchise exhibition. The research team for this study in fact did use this methodology, which had been tested previously by Bradach and Kaufmann (1988). Over a period of four days (March 19-22, 1999), data were gathered at the annual franchise show in Paris. Questionnaires were given to 315 potential franchisees and to 88 franchisers, selected on the basis of convenience. Questionnaire The different parts of the questionnaire are linked to Engel, Kollat, and Blackwell's (1978) first four stages: (1) profile (identification and psychological variables); (2) information search (type of information and its influence on the likelihood of opening a franchise); (3) selection criteria (the order of precedence among the sector, the legal format, the brand name, the factors explaining the choice of the franchise format, and the factors explaining the choice of the specific franchise network); and (4) the intention to purchase (likelihood and deadline). Potential Franchisees: Who Are They? The past experience of the potential franchisee is described with the typical items: age, experience, and educational qualifications. Of those interviewed, 79 percent were male. The average age was 37, with none being under 20 or over 64. Two socioprofessional groups were in the majority: executives (35 percent) and company managers and shopkeepers (31 percent). It was observed that 13 percent were unemployed. Looking at the future entrepreneur's educational qualifications, it can be noted that more than 50 percent have reached A-level (allowing one to attend university), and 29 percent have a master's degree. The proportion of self-employed men or women was low. The rise in applicants' educational level may be attributed to franchisers' recruitment policy and network operation. Applicants are subjected to very specific requirements. Franchisers need to have the organizational resources to satisfy the prospective franchisees. …