Similarities and Differences in UK and US Franchise Research Data: Towards a Dynamic Model of Franchisee Motivation

Abstract

PROFESSOR JOHN STANWORTH IS DIRECTOR of the International Franchise Research Centre, at the University of Westminster, England, and Professor Patrick Kaufmann is associate professor of marketing at Georgia State University, USA. The dominant quest for 'independence' (and allied intrinsic satisfactions) among those entering self-employment has been well-documented in the UK, the USA and elsewhere. This appears to hold true for those entering franchising as well as those staging an entry into more conventional small businesses. However, in addition to this, franchising, as a 'tried-and-tested' business format is designed to appeal to motives of economic security far sooner than would normally be the case in a small business career. Additionally, franchisors frequently acknowledge the changing developmental nature of franchisee motivation over the lifespan of a career in franchising and yet, to date, no theoretical framework has been developed to aid an understanding of the dynamic and changing nature of franchisee motivation and its behavioural implications. This current paper represents a first stage attempt at construction of a motivational model capable of being extended through the full career of a franchisee. The research reported here examines data drawn from 728 face-to-face interviews with individuals ('potential franchisees') attending franchise exhibitions held in London, England, and Washington DC, USA, during the spring of 1994. The results indicate marked similarities. The sample is disaggregated into three distinct sub-samples which are then treated as cross-sectional in terms of their socialisation into patterns of motives normally associated with self-employment. The model which emerges is seen as being capable of being extended through the entire career of a franchisee and the paper points to areas of future research required to develop further this process of model construction.

Entrepreneurial signaling to attract resources: the case of franchising

“…An initial perusal of franchise opportunity listings, as in Entrepreneur magazine, suggests thousands of choices. However, existing research suggests that individuals choose an industry sector first, then select a chain (Stanworth and Kaufmann, 1996), and those authors, unlike other researchers, examined franchisees in the process of making a decision (rather than retrospectively). Industry guidebooks advise potential franchisees to select a franchise in this way (see, e.g.…”

Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

“…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.…”

Quality signaling through ex-ante voluntary information disclosure in entrepreneurial networks: evidence from franchising

“…We measure these costs using the size of the chain -this is a proxy for capturing ex-ante costs (precision of the information) and ex-post costs (number of potential litigants, likelihood of leakage of proprietary information as well as access to resources for deterring and fighting potential litigation and leakage of proprietary information). Competition is defined here between franchisors in the same industry to attract a potential franchisee who has chosen an industry sector (Michael, 2009;Stanworth & Kaufmann, 1996). We measure competition in two ways -market share and two-firmconcentration ratio 5 .…”

“…For example, when prospective franchisees consider buying franchising rights from a franchisor, they are likely to be interested in knowing how much money an average franchisee can make in that chain. In this regard, scholarly empirical research in franchising yields two important insightsthe quality of the franchise business is very important for potential franchisees (e.g., Stanworth & Kaufmann, 1996) and franchisee expectations of the future value of the franchise business are frequently not met (Grünhagen & Dorsch, 2003). It is possible that franchisee dissatisfaction with unmet expectations can be traced to incomplete information available to prospective franchisees about the quality of the franchisor -this reflects the classical adverse selection problem in agency theory.…”