Opportunity recognition and cooperation flexibility of entrepreneurial franchisees

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Purpose– The purpose of this paper is to theoretically and empirically demonstrate the channel relationship between franchisors and franchisees. It examines four essential constructs that may lead to successful long-term franchising relationships: the competitive advantage of franchisors, operational assistance, trust, and intention to continue. Moreover, this study attempts to investigate the multi-unit initiation of franchisees and their subsequent propensity to franchise moderated by entrepreneurial opportunity recognition and cooperation flexibility of franchisors.Design/methodology/approach– The survey results of 234 franchisees’ responses were analyzed to test the proposed hypotheses and research model using partial least squares modeling. Data were collected in Taiwan.Findings– It was found that operational assistance of franchisors significantly develops the trust of franchisees and their intention to continue; and cooperation flexibility of franchisors has the positive influence of trust on the entrepreneurial propensity decision of multi-unit franchisees.Practical implications– Franchisors have the responsibility to develop a consistently aligned set of cues, guidelines, and processes that can define the flexibility-oriented supply culture, and then systematically monitor the achievement of the support mission. Franchisees collaborate with capable franchisors with trust, where both parties are willing to maintain flexibility in their relationship. They will require frequent changes of products and services to meet the unexpected local environment.Originality/value– This study combines entrepreneurial perspective into traditional franchising relationship research for better understanding the multi-unit initiation and subsequent propensity of franchisees toward the franchise system.