Franchise Organizations Research Articles

Decay and Recovery of CSR Routines in Franchise Organizations

Decay and Recovery of CSR Routines in Franchise Organizations

When sergeants can outrank generals: Person-organization fit and the performance of franchisees as agents of their franchisor

We introduce a person-organization fit perspective to explain how franchise organization characteristics shape the link between franchisees' individual attributes and their performance as agents of their franchisor. Showcasing this idea, we develop arguments to suggest why the links between franchisees' agent performance and their prior industry and educational experiences are contingent upon the franchise organization's entrepreneurial orientation, centralization, and formalization. The results from multilevel analyses using the data of 276 franchisees from 47 franchise organizations largely support our ideas. We discuss the theoretical and practical implications of our study for franchising and beyond.

“Living the dream” – a psychoanalytical exploration of franchisee autonomy

ABSTRACT The notion of autonomy is widely drawn upon as a contributor to motivation, satisfaction, and performance in franchise systems, yet autonomy lacks sufficient theorization and is often treated as a black box. We thus remain ill-equipped to explore further the role of autonomy within the franchise organization and to answer questions about how autonomy is experienced, fulfilled and sustained by franchisee business owners. This paper employs a psychoanalytic lens, drawing on the work of Lacan, to offer a deeper psychologized explanation of autonomy. From this theorization, our findings provide an insight into how the quest for autonomy plays an important role in enabling the franchising format and keeping alive the dream of being your own boss, but at the same time the ongoing struggle to craft oneself as autonomous creates tensions and anxieties. The study provides an important addition to economic explanations of franchising.

Sustainability Innovation Enabled by Digital Entrepreneurship in Franchise Organizations

In responding to United Nations' Sustainable Development Goals, using digital entrepreneurship to replicate proven sustainability innovation is an effective approach to scaling up the franchise systems to achieve the goals. The authors show a platform of sustainability innovation enabled by digital entrepreneurship in nurturing a trusted franchisor-franchisee relationship to grow the franchise system. The platform is a digital nervous system consisting of technology networks, social networks, value networks, and responsive networks. The platform is grounded in synergistically integrating the digital capability of developing and disseminating working knowledge globally and effective entrepreneurial solutions locally. Sustainability innovation through such a methodology is a win-win approach to both franchisor and franchisees. An exemplar illustration of how franchise systems help in the fight against COVID-19 is included.

Prediction of Knowledge Management for Success of Franchise Hospitality in a Post-Pandemic Economy

Due to its unpredictability, the novel coronavirus (COVID-19) pandemic has changed the global business climate and commercial management practices in unprecedented ways. As a direct result of the pandemic, the hospitality and tourism sectors have shut down, and business failure rates have occurred exponentially. The franchise hospitality industry has experienced significant impact and challenged a basic understanding of knowledge management (KM) implementation in the face of the COVID-19 outbreak. A strategic KM implementation practice can not only guide a large-scale operation, but also adjust an organization’s performance and competitiveness. The purpose of this study is to examine the influential criteria of success through effective KM implementation and to predict the probability of successful KM in a post-pandemic era. The conceptual framework for KM applies an analytic hierarchical prediction model reliant upon consistent fuzzy preference relations to assist the franchise hospitality sector’s consciousness of the influential criteria. An empirical case study is used to apply pairwise comparisons used to determine the priority weights and two possible outcomes. The case study will assist franchise organizations to analyze whether or not to implement KM, interdict application, or adopt revised actions. This assistance will enhance the success possibility of KM implementation within such a crisis environment. This study uses a case setting by assessing 15 franchises hospitality experts’ opinions in Taiwan relevant to KM implementation.

Expanding the conceptual domain of governance in franchising

We propose a model that expands the conceptualization of governance in franchising that acknowledges traditionally ignored stakeholders, including debt and equity holders. Though research has examined how equity holders benefit from the organizational form of franchising, it has not examined the specific role that equity or debt holders play in governing franchise organizations. Additionally, the unique ontology of franchising, which includes semi-internal members of the organization (i.e., franchisees) that invest their own assets and maintain their own balance sheets, provides a rich context for exploring such governance issues. Franchisees exist outside traditional firm boundaries and are not employees, but they are closely linked to the brand given their significant investments in firm-specific assets. Franchisee-based organizations also are growing their own corporate structures and investments in firm-specific assets, sometimes dwarfing those of their franchisor partners. By expanding the concept of governance in franchising, we open avenues for significant scholarship that can enrich both the governance and franchising literatures. We provide several preliminary propositions and constructs to help encourage new research in this emerging arena of franchising research.

Designing smart dashboard system towards digital leadership in franchise organizations

Although franchise considered as a business system that has many features, that does not mean this business concept does not have weaknesses. Indeed, it’s been hundreds of years the format of this business is running. Even today the franchise business is getting its place as a proven business format and successfully delivering thousands of business brands across various continents and times. If the franchisor is less selective in choosing a franchisee, they may damage the franchisor’s image and business brand as a whole. The reason is if one franchisee does not comply with the operational standards provided by the franchisor then results in customer disappointment, it is not impossible that this customer will perceive all other outlets as bad. Using an innovation assimilation strategy framework, this paper describes how franchise organization used its implementation of a Smart Dashboard System to improve performance, allows franchisors to keep a handle on their franchise accounts and put it on a path towards digital leadership.

Managing a Mission-driven Franchise Organization: An Empirical Investigation of Organizational Practice and Individual Outcomes

The purpose of this research is to investigate the interplay among organizational practice, the adoption of a management philosophy and individual outcomes in a mission-driven multinational education franchise system. A sample of 1,700 potential survey participants throughout the focal organization in both Canada and the United States was used, including 1,282 franchisees and 418 employees. A total of 152 responses were received, including 83 responses from franchisees and 69 responses from corporate employees. The findings of the study provide evidence that the adoption of a management philosophy will mediate the relationships between a philosophy-oriented organizational practice and the individual outcomes in the context of a mission-driven education industry franchise–franchisor setup in North America. One obvious limitation is that the data collection was conducted from within a single organization. The findings of the study are specific to the North American region. Hence, the generalizability is limited. The article builds upon Wang’s ( Journal of Business, 2011, Ethics, 101(1), 111–126) study by adding new measures. The empirical evidence of the study confirms that it is possible for a franchise organization to utilize corporate mission and management philosophy to govern a high level of unity between all stakeholders in a franchise system.

Strategic Direction and Sustainable Development in Franchising Organizations: A Conceptual Study

Franchising is viewed as a significant industry in contributing to the global economic development by generating an average of $3.7 billion in annual franchise sales from 40 countries and provides over 18 million jobs opportunities. Due to the expansion of franchise business markets in Malaysia, the number of franchise outlets keeps increasing more than doubled within six years, with total 10720 outlets in 2010 to 23140 outlets in 2016. To intensify the continuance of this expanding process, franchise entrepreneurs need to conserve a sustainable creative value in undergoing the challenging of the business environment. The limitations of internal and external factors such as core capability, government support and other related dimensions affect the stability of franchise organization. This paper pursues to explore the related existing literature and underpinning theories that reinforce the sustainable development of franchise business. Most of the franchise models are captured in the different analysis of dimensions and strategies on sustainable development goals. The objective of this study is to conceptualize the strategic direction practices and propose a theoretical framework of sustainable franchising that can help the continuance of franchise business. Therefore, by supporting and participation of stakeholders, entrepreneurs, academicians, researchers, and governments, future analysis can develop and expose a sustainable model of franchising.

Multifaceted relational forms in franchise organizations: The role of the franchisor brand

The current study introduces the brand into the traditional franchisor-franchisee dyadic framework and substantiates its impact on franchisee attitudes and behaviors. A qualitative exploration revealed that franchisees use the brand to construct their identity and enjoy hedonic pleasures from the products and service units. A strong franchisee-brand bond further alleviated the tension in the relationship with the franchisors. Franchisees also enjoy rewarding relationships with various stakeholder groups with the brand at the center of the relationships. We introduce a novel relationship framework that paves many avenues for future research.

Entrepreneurial Orientation Rhetoric in Franchise Organizations: The Impact of National Culture

This study examines the role of national culture on the entrepreneurial orientation (EO) rhetoric contained within franchisee recruitment promotional materials, where EO rhetoric is defined as the strategic use of words in organizational narratives to convey the risk taking, innovativeness, proactiveness, autonomy, and competitive aggressiveness of the firm. The sample comprised 378 franchise organizations, in five different countries (Australia, France, India, South Africa, and the UK). The results indicate that franchise systems operating in high uncertainty avoidance and feminine cultures use less entrepreneurially oriented rhetoric, suggesting that EO rhetoric in franchise organizations varies according to different national cultural contexts.

Adaptation and Unit Performance in Replicating Organizations

The replication of a business model across different geographic locations is the main form of growth for multi-unit replicating organizations such as Starbucks, Walmart, Planet Fitness, or Uber. While extant research has documented that the individual units of replicating organizations tend to engage in local adaptation, it has offered conflicting conclusions on the performance consequences of such unit-level adaptation. This paper argues that distinguishing between two qualitatively distinct types of unit- level adaptation – incomplete replication, which consists of the omission of required template elements, and augmentation, which consists of the addition of optional elements that are not among the required template elements – may help reconcile the existing disagreement in the literature. We develop theoretical propositions on the effects of incomplete replication and augmentation on unit performance in replicating organizations and subject them to an empirical examination. Using a unique dataset that tracks unit-level adaptation in a large, U.S.-based franchise organization over a period of eleven years, we find that these two types of adaptation have opposing effects on unit performance: while incomplete replication increases a focal unit’s likelihood of failure, augmentation reduces it. This study, thus, moves the debate away from an either-or replication dilemma toward a view of replication strategy as a duality of stability and change.

A relational performance model for developing innovation and long-term orientation in retail franchise organizations

A relational performance model is developed to show how innovation and long-term orientation can be evaluated and monitored within franchised retail service organizations. Using principles of justice from social exchange theory as a guide, our performance model measures how franchisee entrepreneurial passion (EP) and perceptions of fairness help to promote innovation and long-term commitment across retail franchise organizations. We test our model using data collected from one large U. S. retail service organization ($5B+ annual revenue) and its independent franchise operators. We discover that targeting distributive justice (or fairness) helps to leverage the EP of the independent operators for promoting innovation, while both procedural and distributive elements of the organizational justice climate help to enhance franchisee's long-term commitment. Moreover, we find that retail franchise operators perceive organizational justice differently than do corporate district managers, which suggests several important implications for both research and practice.

From Rags to Bridges: How Social Franchise Organizations Scale

Little is known about how social franchising organizations emerge and scale over time. Using a longitudinal case study approach, we examined a community-embedded social enterprise that scaled into ...

‘We are very focused on the muffins’: Regulation of and compliance with industrial relations in franchises

The highly successful franchising approach contains features of both large and small firms. We develop a ‘diverse accountabilities’ model of franchise organisation of employment relations, acknowledging the limitations of agency theory in explaining differences between franchisors’ treatment of product and employment matters, particularly those associated with compliance with industrial legislation and awards. The model was broadly consistent with existing literature and our own multiple-case study of Australian food franchises. High rates of compliance with industrial relations (IR) standards were unlikely. The involvement of franchisors in franchisees’ IR activities appeared to vary substantially, but was always well below that provided in other human resource management (HRM) or product-related issues. Evaluation and monitoring of franchisee behaviour is often neglected, and instead the consequences of non-compliance, if discovered, are potentially serious for the franchisee. Our approach helps explain the treatment of IR in terms of financial benefits for franchisors of operating a business model with marketing and product management features – and to some extent HRM features – of a large business, but the IR characteristics of small businesses.

A Multi–Study Investigation of Outcomes of Franchisees’ Affective Commitment to Their Franchise Organization

Franchisees’ affective organizational commitment refers to the degree to which franchisees experience an emotional attachment to their franchise organization. Using a social exchange theory perspective, this research reports four studies that explore the relationship between franchisee's affective commitment and franchisee outcomes. We found that affective commitment to the franchise organization was positively related to franchisee objective performance (Study 1) and intent to acquire additional units (Study 2), and negatively related to franchisee opportunism (Study 3) and intent to leave the franchise organization, particularly when continuance commitment (i.e., commitment based on the cost associated with membership to the franchise) was low (Study 4). The implications of these findings are discussed.

Investigating the dual-route effects of corporate branding on brand equity

This research investigated the multilevel relationships among corporate branding, brand citizenship behavior, and brand equity using a hierarchical linear modeling method. The corporate branding construct represents practices that could improve the brand cognition and brand attitude of multiple stakeholders. Brand citizenship behavior indicates that employees are altruistic toward and identify themselves with brands. Brand equity was assessed using customer data to measure their awareness, association, quality perception, attitude, and loyalty toward a corporate brand. This study obtained data from 283 employees, 250 supervisors, and 577 customers of 31 franchise organizations to demonstrate the results at different levels. The results of our analysis indicate that corporate branding exerts a positive effect on brand citizenship behavior and customer-based brand equity. Furthermore, when aggregated, the brand citizenship behavior of firms positively affects their corporate brand equity. In addition, brand citizenship behavior mediates the relationship between corporate branding and brand equity. Brand managers should consider adopting corporate branding practices to encourage employees to engage in brand citizenship behavior, which contributes to brand equity.

Quiescent Tactics of Resistance: How Franchisees ‘Make-do’ Within the Franchise Organization

This paper challenges our existing conceptions of the role of the franchisee. It does so through examining the different ways in which franchisees challenge the paradoxical organizationally constit...

Exploring the impact of franchise support on franchisee acceptance of intranet in quick service restaurant (QSR) franchise system

Purpose – The purpose of this paper is twofold: to investigate the impact of franchisor support on quick service restaurant (QSR) users’ intranet acceptance; and to examine the technology acceptance model (TAM) to explain QSR users’ attitude toward the franchise intranet usage. Franchisors are building intranet systems as a communication tool to assist their franchisees in performing their jobs better. However, there is a little available literature that discusses in detail the use of the intranet by franchise systems. Design/methodology/approach – This study adopted the TAM to investigate the acceptance of the intranet in the context of QSR franchise systems. The original TAM was modified to include an external variable, franchise support. A total of 161 returned and completed responses were examined. Descriptive analysis, validity, principal component factor analysis and regression analysis were used to estimate the relationships between constructs. Findings – The key finding of this study is that franchise support is a key in the decision for users to use intranet systems in the QSR franchise systems. This study also confirmed that there are positive and significant relationships among key variables: franchise support, perceived usefulness of intranet, perceived ease of use of intranet, attitude toward using intranet and behavioral intentions to use intranet. Regression analysis revealed that TAM is a valid model in predicting intranet adoption in restaurant franchise systems. Originality/value – This study pursued franchise support, which was not included in the original TAM, to see how it affects perceived ease of use, perceived usefulness and intention to use. In addition, a list of recommendations for improving the situation in that franchise organization is provided.

Influential Factors of Consumer Preferences in Choosing Franchise Food Outlets in Bangladesh.

Franchising is a familiar form of business in Bangladesh at the present time. Today established franchise brands operate in different lines of business in Bangladesh. Very few of them are successful and well recognized to the consumers because of their quality and performance. This study reveals some factors which influence the preference of consumers to analyze the performance of franchise organizations in Bangladesh. The results indicated that there is a positive relationship between those factors and preference of consumers in choosing franchise organization. The findings of this study suggest that product and service quality along with proper branding are the key factors. Moreover pricing, hygiene factors and location advantage of the franchise food outlets play vital role in consumer preference. It is also found from this study that the franchise organizations should take more promotional efforts to enhance their demand