The Impact of Intranet Technology on Power in Franchisee/Franchisor Relationships

Abstract

In this exploratory study we investigate the impact of an organization-wide intranet on the power relationships between franchisee and franchisor. This article reports on a study of an intranet implementation at PJ’s, a franchise organization consisting of 25 coffee and tea cafes. Through use of interviews as well as a detailed case study of one franchisee, we examine how the relationship between franchisor and franchisee changes with the implementation of an intranet. Among the findings was that the intranet appeared to increase power of both franchisee and franchisor, though the franchisor continued to have relatively more power than the franchisee. The franchisor did not include franchisee to franchisee communications as an intranet feature and, interestingly, the franchisees did not seek to develop such a virtual community outside of the system. We speculate that the current satisfaction with the franchisor among franchisees might explain disinterest in such a community. We also found evidence that some franchisees who entered the franchise organization early in its evolution might react much differently to the implementation of the intranet than those who invested in the more established organization several years later.