Retail Franchising Research Articles

Retail franchise ecosystem dynamics: Insights from countries of varied development levels

This study explores the influence of entrepreneurial ecosystems on international franchise expansion. We understand franchising as a part of retailing and reflect on various country-level factors that impact the international franchise growth in 52 developed and emerging markets. We classify developed and emerging markets based on the Human Development Index (HDI). Employing an entrepreneurial ecosystem framework initially applied to new business growth in cities, we investigate how cultural, institutional, economic, and infrastructure factors affect franchise growth. Our findings indicate that well-developed infrastructure, economic freedom, and supportive laws contribute to franchise expansion, while locations with high crime rates are less attractive to franchise expansion. Surprisingly, increased internet access or higher spending on research and development does not consistently further franchise expansion. Countries with higher levels of human development tend to have franchises that are expand more rapidly. However, we found little difference between countries with very high development and those with high development standards. This study helps us understand what makes franchise business expansion work and how they can succeed in different countries. Implications for businesses and governments looking to support franchise growth are explained. Finally, the results reflect the importance of understanding the unique dynamics of emerging markets and offers actionable insights for businesses and policymakers aiming to foster retail ecosystems and franchise on these specific markets entrepreneurship globally.

The moderating role of servant leadership in the relationship between organizational structure and performance in fashion retailing

PurposeThis study aims to reveal how the organizational structure (vertical integration vs. franchising) of 308 stores in a Spanish fashion retail franchise chain affects their performance measured through two key performance indicators commonly used in this industry, namely, labor productivity and service quality ratings. We also appraise the moderating role played by the servant leadership of franchisees and managers of company-owned outlets to explore its influence on the relationship between organizational structure and store performance.Design/methodology/approachWe have used multivariate analyses to study the research questions, with a panel dataset of quarterly store-level data for the period January–December 2022.FindingsVertically-integrated stores record lower labor productivity than franchised ones. This impact is lower in stores run by individuals high in servant leadership than in those run by individuals low in it. Franchised outlets also record lower ratings in service quality than vertically-integrated stores, and this negative impact is weaker in stores run by individuals high in servant leadership.Originality/valueNothing has thus far been published on the moderating effect of servant leadership in the relationship between the organizational structure of different stores and their outcomes in franchise systems.

A study on measuring service quality of Domino’s in Panvel Region

The purpose of this study is to measure service quality of Domino’s in Panvel Region. Dominos is one of the oldest & finest fast food restaurants since the 1960s. Dominos pizza is most preferred by the customers. The retail franchise outlet of dominos, on the Forbes Private 500 list, Domino's has the position of the 200th largest private firm. In addition to specialty items like flavored crust pizzas, Domino's offers a wide range of ‘pizza products, including pan, thin-crust and deep-dish pizzas’. Here the primary & Secondary method is used for data collection for the research. A Structured Questionnaire was prepared to collect data from the respondents for the analysis. It is observed that Paired Sample T-test ( Perceived & Expected Mean ) and Reliability Analysis is used for scale data. Resulting into P-value 0.971 which indicates that scale data is quite reliable and reductant. factors like “Reliability, Price & Usage, Assurance, Ambience, Empathy” etc are used to measure service quality of Domino’s in Panvel Region. It is concluded that variables like Convenient staff, order & Management systems, location, cleanliness proves no significant difference between expected and perceived mean of service quality of Dominos in Panvel Region.

Critical success factors of ERP implementation at retail franchise company in Indonesia

As technology develops, many companies seek to innovate and implement technology, one of them is ERP to support their business processes. One of these companies is PT Sumber Alfaria Trijaya, Jember, Indonesia. Many factors were affected the quality of ERP implementation. One of them is known as the Critical Success Factor (CFS). This study aimed to describe implementation of ERP application and the Critical Success Factors during ERP deployment at PT Sumber Alfaria Trijaya (SAT), Indonesia. This study used qualitative method for gaining data and research analysis. Interviewed are done with the key users. The results of analysis showed that five critical factors that supported and influenced the ERP implementation in the company, namely; Management Commitment and Support, User Involvement, Communication, Hardware and Equipment, and Education and Training. Those five factors have significant impact on the successful of ERP implementation at retail franchise company in Indonesia. In conclusion, the implementation of TAF application improved the quality of accounting information system information for the company.

STRATEGI KOMUNIKASI MEDIA SOSIAL INSTAGRAM INDOMARET DALAM MEMBANGUN BRAND AWARENESS

PT. Indomarco Prismatama is one of the pioneers of retail in Indonesia, which was established in 1988. Since being franchised in 1997, it is a pioneer in the modern store retail franchise business. In 1997 Indomaret expanded its first franchise minimarket business in Indonesia after having more than 230 minimarket outlets. The purpose of this study is to determine the Brand Awareness built by PT. Indomarco Prismatama in terms of the purpose of doing Instagram social media account credibility, content management, and building interactions on Instagram social media accounts. This study uses a qualitative approach with case study methods on Instagram accounts of PT. Indomarco Prismatama to describe and explore the Brand Awareness phenomenon that occurred at PT. Indomarco Prismatama. This research was conducted by referring to the concepts and theories, namely The Circular Model of Some (Regina Lutrell, 2015), the Brand Awareness pyramid (Durianto, 2004). The conclusion of this study is that content management at PT. Indomarco Prismatama applies The Circular Model of Some in its content creation so that it can focus on the message, customer, and context. And also so that the content can provide benefits to the community.
 Keywords: brand awareness, content management, Instagram, social media

Penarikan Uang Kembalian Sebagai Donasi Prespektif Hukum Ekonomi Syariah

This article examines the withdrawal of change as a donation to the Retail Franchise at Alfamart Kebonsari Petarukan Pemalang. His writing was inspired by the fact that Alfamart's management had difficulty in providing second change, so the policy was to choose change into donations. The problem is how to practice withdrawing money as a donation, how and how to practice withdrawing money from the perspective of Sharia Economic Law. This research uses an approach approach other than that the data sources used are primary and secondary data sources, primary data sources are direct data sources obtained by interview and observation techniques while the primary data sources in this study are sellers, buyers, cashiers. While secondary data sources are obtained from other sources such as books, journal articles, and other information that will be discussed by researchers as supporters. With an approach approach, the results of the study show that: the practice of withdrawing change as a donation at the Retail Franchise at Alfamart Kebonsari Petarukan Pemalang is carried out voluntarily, without coercion from consumers; and the amount generated is very large, because it is distributed to the poor, so withdrawal of change as a contribution in Economic Law is allowed because it is suitable for worship.

An overview of Fiji's retail franchising climate

The paper examines the retail franchising climate in Fiji, a small Island country of South Pacific Region This paper in particular discusses the various arrangements in which franchises operate in Fiji and will set the scene for Fijis retail franchise system. There is a lot of potential for franchises to prosper in Fiji if they do it right. Fiji is a growing market with opportunities that many businesses can take advantage of and exploit. The present government has also made positive changes to some of its laws so that businesses can operate better. This study has found that despite the Fiji government encourages the growth of franchise industry, there is absence of an entity or a franchise association that could collect, store and maintain proper records of franchise industry in Fiji.

Prevalence, Drug Resistance, and Virulence Genes of Potential Pathogenic Bacteria in Pasteurized Milk of Chinese Fresh Milk Bar

Fresh Milk Bar (FMB), an emerging dairy retail franchise, is used to instantly produce and sell pasteurized milk and other dairy products in China. However, the quality and safety of pasteurized milk in FMB have received little attention. The objective of this study was to investigate the prevalence, antimicrobial resistance, and virulence genes of Escherichia coli, Staphylococcus aureus, and Streptococcus in 205 pasteurized milk samples collected from FMBs in China. Four (2.0%) isolates of E. coli, seven (3.4%) isolates of S. aureus, and three (1.5%) isolates of Streptococcus agalactiae were isolated and identified. The E. coli isolates were resistant to amikacin (100%), streptomycin (50%), and tetracycline (50%). Their detected resistance genes include aac(3)-III (75%), blaTEM (25%), aadA (25%), aac(3)-II (25%), catI (25%), and qnrB (25%). The S. aureus isolates were mainly resistant to penicillin G (71.4%), trimethoprim-sulfamethoxazole (71.4%), kanamycin (57.1%), gentamicin (57.1%), amikacin (57.1%), and clindamycin (57.1%). blaZ (42.9%), mecA (28.6%), ermB (14.3%), and ermC (14.3%) were detected as their resistance genes. The Streptococcus strains were mainly resistant to tetracycline (66.7%) and contained the resistance genes pbp2b (33.3%) and tetM (33.3%). The virulence genes eae and stx2 were only found in one E. coli strain (25%), sec was detected in two S. aureus strains (28.6%), and bca was detected in one S. agalactiae strain (33.3%). The results of this study indicate that bacteria with drug resistance and virulence genes isolated from the pasteurized milk of FMB are a potential risk to consumers' health.

Revisiting the contingency theory: dissection of entrepreneurial orientation elements in retail franchisee performance

PurposeThis study aims to analyze how various contingencies within the contingency theory influence the entrepreneurial orientation (EO) elements and performance of retail franchisees in a South Pacific Island nation.Design/methodology/approachThis study employs a quantitative approach of data collection from 203 managers in a total of 89 retail franchise outlets. Convenience and snowball sampling techniques were used with data analysis through SPSS AMOS and covariance-based structural equation modelling (CB-SEM).FindingsThe results confirmed that technology, innovation and promotion; competitive edge and value co-creation; high return opportunity capitalization; and empowerment and support influenced franchisee performance, while responsive customer focused leadership and competitor knowledge proved to be insignificant. The findings supported EO's influence on both financial and non-financial indicators, with greater influence on financial indicators. The result revealed that EO accounts for partial impact on franchisee performance, while the remaining impact could be attributed to organization and environment contingencies.Originality/valueThe study proposes a novel context of EO in franchising, where we dissect key elements within the EO dimensions. It also adds to the extant literature on how the broader context of environmental and organizational factors termed as “strategic fit” affects entrepreneurial franchisee performance.

Multi-Period Inventory Coordination in Franchise Networks: the Necessity of Trading Platform and Franchisor Involvement

The cloud-based OneView Inventory Management (OVIM) platform offers retail franchise companies a competitive edge and disrupts the operations of every party in their networks. In this platform, designed and operated by the brand (franchisor), every retailer (franchisee) can frequently access to all brand inventory virtually as they trade (buy or sell) inventory with each other and the brand, rather than traditionally procure from the brand. This paper studies whether and how the brand should craft the trade rules for such frequent inventory-trading to achieve the coordination (maximize the profit of the entire network). We find that the coordination can be achieved via (1) the use of the coordinating trade prices (CTPs) and (2) shipping cost being split between the buyer and the seller in any proportion. The CTPs we characterize are the same regardless of the source of inventory, state-dependent, and may include a trading-reward to prevent retailers from strategically holding more or less inventory than the system-optimal in the previous period to “manipulate” the trade price. The good news is that these CTPs are quite intuitive (market-clearing) and can be easily calculated and automated into the OVIM platform ex ante. Technically, we are the first to model these multi-period trading as Nash dynamic games between the retailers and prove that the coordination can be achieved under the unique equilibrium. We also provide practical insights that the coordination requires both the existence of the inventory trading platform like the OVIM and the brand’s proactive involvement as the trade rule-maker and market-maker of the platform.

Understanding Chinese consumers' pre-purchase value expectations: the role of country of origin effect

PurposeThis study aims to examine the effect of country of origin (COO) on customers' value expectation and willingness to pay by employing signalling theory and cue utilisation.Design/methodology/approachThe data were collected from 386 customers via an online survey in the context of Australian food retail franchise stores in China.FindingsThe findings indicate that COO origin is an important determinant of customer expectations including service quality, social value, emotional value, monetary price, behavioural price and reputation. Furthermore, the only social value was a significant predictor of willingness to pay. Although the direct effect of COO on willingness to purchase was not significant, the COO had a significant indirect effect on willingness to pay via social value. Finally, the COO has a stronger effect on monetary price expectation among customers who were aware of the country brands than those who were unaware.Originality/valueThe study extends the body of knowledge related to the effect of COO during the pre-purchase process and provides important implications for retailers who are looking to enter an overseas market such as China.

U.S. Franchise Regulation as a Paradigm for the European Union

The protection afforded to franchisees differs widely across the world. Nations with economically strong franchise sectors typically regulate the contract’s bargaining phase and post-formation. Responding to the European Parliament’s call for a review of regulations governing Europe’s underperforming retail franchise sector, we propose reforms to counter the structural and economic inequality between franchise parties. Drawing on lessons from comparatively successful federal frameworks, we present a regulatory trifecta of mandatory disclosures to prospective franchisees, required express or implied contractual obligations and rights for both franchisors and franchisees, and compulsory adherence to certain protections of franchisees throughout the franchise relationship.

A Western franchise in Shanghai, China: a late entrant’s success

ABSTRACT This research examines the timing of a food retail franchise’s entry into Shanghai, China. Previous literature espouses the benefits of early movers, but there is a lack of focus on related contingencies that influence the effect of entry timing on franchising outcomes. We employ a qualitative case study in two phases. The first interviews key franchise personnel regarding their motivations and strategies for expanding. The second utilizes focus groups to gain an understanding of customers’ perspectives. This paper considers the implications of the timing of market entry for franchises. Applying resource-based view, dynamic capabilities, and agency theory and institutional theory, the study provides an understanding on how entry timing should be analysed in conjunction with other contingencies including the area that is entered, the type of entry, the relevant players and the strategies, resources, capabilities, and assets needed to enter in order to achieve desirable outcomes.

Service system well-being: conceptualising a holistic concept

PurposeThe purpose of this paper is to develop a concept of service system well-being by presenting its collective conceptualisation and ten key domains.Design/methodology/approachService system well-being domains were established using multi-level theory and a qualitative case study research design. To validate the domains initially developed from the literature, 19 in-depth interviews were conducted across two case studies that represented the service systems of a hospital and a multi-store retail franchise chain. A multi-stakeholder approach was used to explore the actor’s perspectives about service system well-being. Key domains of service system well-being were identified using deductive categorisation analysis.FindingsThe findings found evidence of ten key domains of well-being, namely strategic, governance, leadership, resource, community, social, collaborative, cultural, existential and transformational, among service system stakeholders.Research limitations/implicationsService system well-being is a collective concept comprising ten domains that emerged at different levels of the service system. The propositions outlined the classification of and interlinkages between the domains. This exploratory study was conducted in a limited service context and focussed on ten key domains.Practical implicationsService managers in commercial and social organisations are able to apply the notion of service system well-being to identify gaps and nurture well-being deficiencies within different domains of service-system well-being.Originality/valueBased on multi-level theory, the study is the first to conceptualise and explore the concept of service system well-being across multiple actors.

THE APPLICATION OF PROMETHEE AND BORDA METHODS FOR SELECTING BUSINESS LOCATION

The development of a franchise business requires the opening of new branches to be able to expand the wider market in the community. The selection of a franchise's new location is a very decisive factor in the success of the franchise in the future. With the new location allows to increase the range, market and number of consumers. The object of research in this case is a retail franchise. The PROMETHEE method is used to manage individual decisions of each decision maker, while the Borda method is used to manage group decisions on the results of the PROMETHEE method ranking. The use of these two methods is one solution to produce more objective group decisions. Alternative ranking of this location is in accordance with the rules and policies and procedures for opening a new branch of a retail franchise. The variables in this study are facilities and infrastructure, crime, per capita income, economic growth, population and the number of retail franchises around the alternative location for opening the retail franchise branch. The results obtained from this study are location E or Endrosono area as the best alternative location.

E­commerce structures for retail and service franchises

PurposeThe purpose of this paper is to provide an in-depth investigation of e-commerce strategy implementation in mature franchise organisations from both franchisor and franchisee perspectives.Design/methodology/approachThis research employed a multiple case study method where the e-commerce strategies of two mature franchise organisations were investigated in depth. Franchising experts were interviewed to provide an additional dimension to this study.FindingsThis research found that e-commerce must be integrated with the overall business strategy for optimal franchise performance. Since all parties to the franchising relationship are affected by the introduction of e-commerce, both the franchisees’ and the franchisor’s interests must be considered when the strategy is being developed. In addition, the consumer’s perspective is central to how e-commerce is structured, and franchisees are best placed to know their customers’ needs because they are directly involved in operating their business and interfacing with customers.Practical implicationsA preliminary model for e-commerce structures in service and retail franchising has been developed that depends on the nature of the business, the distribution arrangements and the order fulfilment arrangements. The two main avenues in e-commerce structuring were centralisation and decentralisation.Originality/valueThis study contributes to knowledge through an in-depth investigation of the internal process of e-commerce implementation in franchise networks from both franchisor and franchisee perspectives.

Organization in New Business Environment: a Franchisor’s View

Abstract This paper investigates the basic risk and incentives relationship in franchising companies. The results of past research reflect volatile influence of risk and incentives. An in-depth analysis of this relationship was conducted using case study approach, including 12 international franchise firms of two types. Our study included retail and service franchising. Findings from this research confirm basic agency theory predictions. The risk-incentives relationship is negatively correlated in retail franchise companies, due to lower royalties in the sector. Service franchise companies do not follow the same concept, due to their adaptability of franchise system to local markets. We believe service franchise systems might be responsible for volatility. However, both types of companies nurture and develop strategies based on experience and intuition. Findings of the research offer important insights in understanding the nature of franchisor’s risk perception, as the basic underlying mechanism to the risk and incentives relationship.

International franchising in the fashion industry from the franchisor perspective

Over the years, fashion retail franchising in emerging markets has seen a significant growth. Nevertheless, when a fashion brand decides to franchise its business, it also affects the control level over franchise store operations, which may influence a brand's image and overall success. This paper investigates how international fashion companies can implement and assure brand standards and qualities among their franchise network in emerging markets. With exploratory qualitative research authors give more insight into the general motives for fashion companies franchising their businesses in emerging markets and the implementation of brand standards, assuring quality and control, and challenges in operating franchise stores. The research shows that the implementation process and assurance of brand standards and qualities involve high management and control skills, in which a solid, lasting relation between franchisor and franchisee is required. With relationship marketing, the brand standards implementation can be strategically planned and managed. Since follow up and control of brand standards and qualities are often inconsistent, the procedures must get standardised.

Knowledge transfer and isomorphism in franchise networks

This study draws on institutional and organisational learning theories to evaluate how knowledge transfer (KT) practices contribute to the development of isomorphism in franchise networks. It also analyses how the characteristics of franchise partners influence this process. Research conducted across a sample of hospitality and retail franchisees in Turkey reveals how the transfer of explicit knowledge aids in the realisation of coercive isomorphism and the transfer of tacit knowledge supports mimetic isomorphism. Additionally, the study identifies the factors that influence the extent to which these types of isomorphism are achieved. In doing so, it identifies the importance of franchisor institutionalisation, or the degree to which a strong and supportive infrastructure is developed, to isomorphism within franchise networks. Institutionalisation impacts on the antecedents to KT. Differences between the KT practices of hospitality and retail franchise networks are also identified.

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.