We explore one prolific type of service triad, the franchise triad, involving three primary stakeholders: the franchisor, the franchisee and the customer. In this triad, franchisees use their affiliation with the franchisor's brand to attract customers to their local outlets. In exchange for the right of assuming the identity of the brand, the franchisee pays the franchisor royalties and retains residual profits. Applying Agency Theory, this paper examines the inherent conflict of interests between a principal (i.e., franchisor) that controls and manages brand equity as a shared resource and an agent (i.e., franchisee) that retains pricing right and profits from the identity of the brand by interacting directly with customers. We empirically isolate the effect of triad structure on outlet performance by matching two unique datasets. One set of data captures operational performance in the form of aggregated online review scores and the other financial performance including average daily hotel rate and revenue per available room. We find that franchisees charge higher prices than their corporate counterparts even when controlling for operational performance. Even though franchisees charge higher prices they maintain similar financial performance in terms of revenue per available room. These results suggest that the triad structure plays a significant role in franchisees' ability to free-ride on shared brand equity and have important managerial implications for effective outsourcing, contract design and performance evaluation for a wide range of service industries.

Utilizing an event study methodology of 185 product recall announcements, this study examines to what extent social media hurts a company's shareholder value in the event of a product recall.In addition, we explore whether a company's brand equity and engagement in online chatter potentially mitigate the negative effects of social media surrounding the recall. We operationalize four metrics of online word-of-mouth (WOM) that may moderate negative product recall effects: volume, valence, growth rate, and breadth. The findings suggest that product recalls result in significantly negative abnormal returns for firms. Furthermore, the volume, valence and growth rate of online WOM exacerbate this negative effect of a product recall on firm value. Most importantly, we find negative effects of the volume and the valence of online WOM on firm value are lower for brands with strong brand equity. Surprisingly, we find no effect of company involvement in mitigating the potential negative effects of social media during a product recall. Our findings highlight the threats of product recalls and demonstrate that building brand equity may help protect a company in the social media environment.

Utilizing theories of identity this article presents findings from a qualitative study regarding the significant role independent franchisee associations play within franchise systems. The data reveal that successful franchisee associations help manage the inherent tension that exists between cooperation and conflict in franchise relationships. A distinctive adaptive organizational identity provides an association the capability necessary to reframe its relationship with the franchisor as either combative or cooperative in response to changes in a franchisor's identity. Challenging the views of both franchisor stability and the dyadic form that franchisee-franchisor relationships assume, behavioral insight is provided into the actual functioning of franchise systems and new avenues are suggested for theory building in franchising.

This four-part multi-method investigation into the under-researched yet increasingly prevalent phenomenon of consumer-generated advertising (CGA) confirms a performance advantage over traditional advertising and suggests a rationale for this differential. CGAs benefit from heightened consumer engagement and increased trustworthiness. CGAs also garner perceived quality advantages that are linked to consumers lowering their expectations and using different evaluation criteria to judge the ad. The ad creator-a personalized, identifiable and relatable entity in the case of CGAs-plays a central role in anchoring and shaping ad reactions. The "consumer-made" characteristic-the fact that CGAs are not made by companies but by independent people-is powerful and stands strong in the face of commercial motives, and presents paradigmatic implications for advertising practice and research.

Checkout charity is a phenomenon whereby frontline employees (or self-service technologies) solicit charitable donations from customers during the payment process. Despite its growing ubiquity, little is known about this salient aspect of the service experience. The present research examines checkout charity in the context of fast-food restaurants and finds that, when customers donate, they experience a "warm glow" that mediates a relationship between donating and store repatronage. Study 1 utilizes three scenario-based experiments to explore the phenomenon across different charities and different participant populations using both self-selection and random assignment designs. Study 2 replicates with a field study. Study 3 examines national store-level sales data from a fast-food chain and finds that checkout fund-raising, as a percentage of sales, predicts store revenue-a finding consistent with results of Studies 1 and 2. Managers often infer, quite correctly, that many consumers do not like being asked to donate. Paradoxically, our results suggest this ostensibly negative experience can increase service repatronage. For academics, these results add to a growing body of literature refuting the notion that small prosocial acts affect behavior by altering an individual's self-concept.