The construction of a franchise entrepreneurship decision model: The example of convenience store chains in Taiwan

Abstract

AbstractOpportunity identification, opportunity development, and evaluation studies are the main contents in the entrepreneurship literature, but there lacks in‐depth research on the decision‐making process of franchise entrepreneurship. Through case interviews and literature review, this paper presents the cases of four franchise entrepreneurs of convenience store chains in Taiwan as examples to develop a new model of a franchise entrepreneurship decision‐making process. In addition to the new model of this decision‐making process, the following key observations are made based on the case comparison analysis. (1) Franchise entrepreneurs with prior knowledge of relevant industries were all affected by prior knowledge in both industrial decision and organizational type (self‐employment/franchise/merger) decision. Franchise entrepreneurs without prior knowledge of related industries were influenced by social network in both industrial decision and organizational (self‐employment/franchise/merger) decision. (2) Franchise entrepreneurs with prior knowledge of related industries were influenced by prior knowledge and potential financial reward in brand decision. Franchise entrepreneurs without prior knowledge of related industries were influenced by social network and potential financial reward in brand decision. (3) Franchise entrepreneurs with prior knowledge of related industries were influenced by prior knowledge, potential financial reward, and financial resources of the franchise headquarters in the franchise type (franchising/commissioning) decision. Franchise entrepreneurs without prior knowledge of the relevant industry were influenced by the social network, potential financial reward, and financial resources of the franchise headquarters in the franchise type (franchise/authorized chain) decision. (4) Franchise entrepreneurs were influenced by potential financial reward and franchise headquarters management knowledge in the location decision of the start‐up process, regardless of having prior knowledge of the industry or not.