Causes of disruption to franchise operations

Frazer, Lorelle

doi:10.1016/s0148-2963(00)00118-1

Cited by 49 publications

(50 citation statements)

References 21 publications

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“…On the other hand, franchisees' previous experience (ZEE_Experience) does not have any significant effect on early terminations initiated by franchisees. Past literature shows that franchisors do not agree on this requirement, because experienced franchisees may be more difficult to socialize or less compliant with franchisor authority (Lafontaine 1992;Stanworth and Kaufmann 1996;Frazer 2001). Specifically, our finding suggests that recruiting experienced franchisees does not have advantages for avoiding misconceptions and improving their performance and satisfaction with the franchise system.…”

Section: Resultsmentioning

confidence: 63%

“…This involves, for franchisors, recruiting suitable franchisees and, for franchisees, joining a franchise chain congruent with personal goals and abilities. Extant research has also explored various contextual factors affecting terminations, such as industry, system size, or growth (Holmberg and Morgan 2003), and also relates terminations to franchisor support and life cycle (Frazer 2001).…”

Section: Introductionmentioning

confidence: 99%

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Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

López-Fernández

López‐Bayón

2017

Small Bus Econ

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Franchisors capitalize on franchisee entrepreneurial capacity to grow. However, enabling franchisees to develop their ventures may damage system consistency. This dilemma makes conflict particularly prevalent in the field of franchising. Nevertheless, prior research has reported an incomplete picture of factors leading to serious disagreement and premature termination in franchise partnerships. We address this gap, first, by adding the entrepreneurial autonomy of franchisees as a relevant but underexplored source of conflict and, second, by providing a more fine-grained analysis of franchisors' versus franchisees' drivers of termination. Specifically, we focus on the controversial issues of pricing and local advertising policies and analyze how expanding franchisees' entrepreneurial autonomy in these decision areas is related to contract terminations depending on who ended the relationship (the franchisor or a franchisee). The study also highlights less controversial requirements and conditions (e.g., upfront investments, franchisor experience …) that may reduce early terminations. Our empirical objectives are met by using survey data from a sample of franchisor companies. The results show how the performance outcomes of entrepreneurial autonomy differ depending on the decision area in which it is exercised. Results also throw light on the consequences of various critical franchise policies that may be masked if both types of termination (franchisors vs. franchisees) are considered together.

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Section: Resultsmentioning

confidence: 63%

Section: Introductionmentioning

confidence: 99%

Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

López-Fernández

López‐Bayón

2017

Small Bus Econ

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“…They can achieve this goal in two ways: by developing trustful relationships [27][28][29] or by avoiding conflict with franchisees [7,[30][31][32]. To analyze how franchisors develop trustful relationships, studies have focused on measures of relationship quality [33], the franchisee's perceived relationship value [26], the moderators of the relationship [34], interpretation and perception asymmetries between franchisor and franchisee [35], the control mechanisms adopted to avoid free-riding and opportunistic behaviors [36], and the role of the wider business network [37].…”

Section: Economic Sustainability: Franchise Chain Survivalmentioning

confidence: 99%

Economic Sustainability in Franchising: A Model to Predict Franchisor Success or Failure

2017

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As a business model, franchising makes a major contribution to gross domestic product (GDP). A model that predicts franchisor success or failure is therefore necessary to ensure economic sustainability. In this study, such a model was developed by applying Lasso regression to a sample of franchises operating between 2002 and 2013. For franchises with the highest likelihood of survival, the franchise fees and the ratio of company-owned to franchised outlets were suited to the age of the franchise. Surviving franchises were those that opened franchised outlets at a sustainable pace, increased the franchise fee as intangible assets increased, and effectively managed profitability and efficiency.

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“…In this context, many franchisors will select franchisees who have no previous experience in the industry (McCosker & Frazer, 1998;Mendelsohn, 1993), and some even actively recruit inexperienced franchisees because they feel they will be easier to indoctrinate into the system (Frazer, 2001). Cho (2004) recommends that franchising companies should select potential franchisees who have appropriate entrepreneurial personality traits.…”

Section: Franchisors' Preferences In Travel Industry 545mentioning

confidence: 99%

“…Many franchisors prefer candidates experienced in businesses or management; however, others do not give much importance to this aspect. Many franchisors will select franchisees who have no previous experience in the industry (McCosker & Frazer, 1998;Mendelsohn, 1993) and some even actively recruit inexperienced franchisees because they feel they will be easier to indoctrinate into the system (Frazer, 2001).…”

Section: Franchisors' Preferences In Travel Industry 545mentioning

confidence: 99%

Interpreting Franchisors' Preferences in the Travel Agency Industry: The Case of Spain

Guerrero-Casas¹,

Cataluña²

2011

Tourism Analysis

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Travel agency industry is one of the most important and relevant activities of franchise in many countries. One key aspect necessary for the suitable development of the franchise system in any country is the expansion of the franchisors. For this challenge to be a success, the franchisors must select the franchisees correctly. In this work the characteristics of potential franchisees preferred by franchisors are analyzed. A study was made in one of the most dynamic and important industries of the franchise system, that of travel agencies, and it used a combination of the methodologies of conjoint analysis and principal component analysis. The results show the profile preferred by the franchisors and give a ranking of the most important characteristics that the franchisors look for in travel agency franchisees.

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Causes of disruption to franchise operations

Cited by 49 publications

References 21 publications

Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

Economic Sustainability in Franchising: A Model to Predict Franchisor Success or Failure

Interpreting Franchisors' Preferences in the Travel Agency Industry: The Case of Spain

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