Abstract
In spite of the acknowledged importance of the franchisee selection process, only a few empirical studies have examined this research area. This paper employs organizational identity theory to explain when the franchisor desires to select specifically franchisees that have the potential for entrepreneurial behavior. A mail questionnaire survey was utilized to collect data from a sample of franchisors in the UK. The results revealed that the systems that select entrepreneurial franchisees are those that have entrepreneurial values as part of their organizational identity, as reflected in the institutionalized support given by the franchisor for entrepreneurial activities. Additionally, we found that the performance of the franchise system is positively affected where the franchisor seeks to select franchisees whose entrepreneurial values are congruent with those of the system.
Highlights
Within the franchising and entrepreneurship literature, the notion of entrepreneurial franchisees is often viewed as a paradox (Falbe, Dandridge, & Kumar, 1998)
There are a number of potential dimensions to organizational identity, this paper focuses on the entrepreneurial values of the organization
The selection of suitable franchisees is vital to the success of franchise systems (Watson, 2008) and franchisors can use franchisee selection criteria as a key input control to improve the outcomes of their future franchisees (Jambulingam & Nevin, 1999)
Summary
Within the franchising and entrepreneurship literature, the notion of entrepreneurial franchisees is often viewed as a paradox (Falbe, Dandridge, & Kumar, 1998). Clarkin and Rosa (2005: 305) argue that franchising is “seldom viewed as a context in which entrepreneurship is possible” and a study by Ketchen, Short and Combs (2011) of thought leaders in the field of entrepreneurship, found little agreement as to whether franchisees can be considered entrepreneurs. Little is known about the extent to which franchisors view franchisees as entrepreneurs, or desire entrepreneurial franchisees.
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