Abstract
Through a survey-based study of 761 franchisees from four countries, the United States, the United Kingdom, France and Spain – this research examines how a franchisee’s entrepreneurial personality traits affects the financial and relational performance of franchise units. While there is consensus that franchisee characteristics are important for successful franchise networks, there is a long-standing debate within the franchise literature as to the status, and indeed desirability, of franchisees as entrepreneurs. First, we consider how the personality traits of proactivity, innovativeness and locus of control influence the manifestation of entrepreneurial behaviours within the franchise unit, and both the direct and indirect relationships with unit performance. Second, we explore these relationships in two contexts, one associated with high entrepreneurial values (the United States and the United Kingdom) and another with low entrepreneurial values (France and Spain) to determine if the results are consistent across cultures which value entrepreneurship differently. The results suggest that franchisee performance, in terms of both financial performance and relationship quality, are indirectly enhanced by a proactive disposition, mediated by entrepreneurial behaviours. A direct positive relationship was found between locus of control and performance outcomes, but interestingly, franchisees with more innovative personalities performed less well financially. The relationships between franchisee personality, entrepreneurial orientation (EO) and performance were found to be largely consistent across the two cultural groups.
Highlights
The importance of screening and recruiting franchisees has been acknowledged as critical to the success of the franchise system (Jambulingam and Nevin, 1999), but little attention has been devoted to identifying how franchisee personality impacts their behaviour and performance
Through a specific data set of 761 franchisees, collected for the purpose of this empirical study via a survey-based questionnaire in four countries, the United States, the United Kingdom, France and Spain, we offer a number of contributions
We argue that franchisees who are more proactive, have an innovativeness tendency, and an internal locus of control, are more likely to engage in entrepreneurial behaviours that will enable them to grasp market opportunities that they have identified, enabling them to improve their unit’s financial performance
Summary
The importance of screening and recruiting franchisees has been acknowledged as critical to the success of the franchise system (Jambulingam and Nevin, 1999), but little attention has been devoted to identifying how franchisee personality impacts their behaviour and performance. While innovativeness was negatively related to opportunism, the entrepreneurial trait of risk-taking was positively associated These early studies provide some initial evidence to suggest that franchisees who possess entrepreneurial personality traits may perform differently. Franchisee entrepreneurial personality traits – notably (a) proactivity tendency, (b) locus of control, (c) innovativeness tendency – are positively associated with franchise unit EO. We argue that franchisees who are more proactive, have an innovativeness tendency, and an internal locus of control, are more likely to engage in entrepreneurial behaviours that will enable them to grasp market opportunities that they have identified, enabling them to improve their unit’s financial performance.
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