Supersize me? Franchisee size and voluntary compliance with corporate brand‐building initiatives

Abstract

We examine the effects of a franchisee's size, distance from headquarters, and local competition on voluntary compliance with corporate brand‐building initiatives at the outlet level. Specifically, we consider compliance with a corporate social responsibility effort to solicit charitable donations at the time of retail checkout, measuring compliance performance as the amount of donations received at each outlet. Our analysis utilizes an objective, longitudinal sample of 777 franchised outlets in a national quick‐service restaurant chain. Surprisingly, we find that distance from headquarters is positively related to compliance; we relate this finding to recent, extant research on geographic distances and franchisee behaviors. We find the beneficial effects of larger, multiunit franchisees are mitigated as franchisees' geographic distances from headquarters increase; we relate these findings to horizontal agency within franchising systems. We further find that franchised outlets in more competitive markets comply less with brand‐building initiatives, even less so when part of a larger franchisee network. Our results underscore the important moderating role franchisee size plays in outlets' compliance, which we link back to extant perspectives on agency theory. Supplemental analyses consider tensions between compliance and operational efficiency, as well as effects of hypothesized factors on another mandatory form of compliance.

QUICKSERV: a service quality assessment tool for the quick-service restaurant industry

“…This dimension represents the most significant factor because it explains practically 30% of the total variance. This result would be supported by the leading role of the service encounter in this kind of restaurant and the importance of the quickness of service for QSR customers (Massimino and Lawrence, 2019; Lu and Chi, 2018). In fact, it is also noted that the means of the two indicators related to speed of service (“Proper service time” and “Enough staff to attend to consumers”) have higher means than the other indicators, highlighting how, in our case, quickness of service was highly rated.…”

“…This finding is supported by the importance of utilitarian value and the required speed of service in this type of restaurant (Nejati and Moghaddam, 2013; Lu and Chi, 2018; Izquierdo-Yusta et al , 2019) and demonstrates that QSR costumers primarily value a speedy service and pleasant treatment. In this regard, Massimino and Lawrence (2019) recommended measurement and monitoring of the speed of service in QSRs, in order to assure operational efficiency and franchisee compliance. Bode et al (2011) stated that interactions between personnel and consumers during the service encounter have a high effect on service quality perception, and in the same vein, Swimberghe and Wooldridge (2014) expressed that customers who have positive perceptions of the employees with whom they interact will be more likely to identify themselves with firms.…”

Return on Investments in Hotel Franchising: Understanding Moderating Effects of Franchisee Dependence

“…Our study contributes to a growing body of work in operations management that acknowledges franchising as a unique but prolific form of supply chain collaboration (Massimino and Lawrence 2019, Zhang et al. 2015).…”

“…Studies have suggested that certain franchisee characteristics may drive franchisee behavior and affect their willingness to conform to collective efforts (Grunhagen and Mittelstaedt 2005, Massimino and Lawrence 2019). Because franchise networks are geographically diverse and have demographic differences among consumers, centralized messaging and investments will vary in their financial return to different franchisee populations.…”

Expanding the conceptual domain of governance in franchising

“…The focus of system-wide dynamics research and its attendant debates have evolved ( Kaufmann & Dant, 1996 ) to acknowledge the evolution of franchisees from single-unit, “mom-and-pop” entities into large enterprises such as publicly traded companies ( Lawrence, Pietrafesa, & Kaufmann, 2017 ). Nonetheless, a dearth of research exists examining the growth and consolidation of ownership at both the franchisor and franchisee levels ( Massimino & Lawrence, 2019 ), leaving many interesting avenues and topics for future research. For example, franchise organizations can be owned by cooperatives (e.g., Best Western, Ace Hardware, Coop), private equity firms (e.g., Roark Capital, Bain Capital), publicly traded companies (e.g., Domino's Pizza, McDonald's), families (e.g., Chick-fil-A, Enterprise Holdings Inc., H&M), or foundations (IKEA Interogo).…”