Understanding franchisee performance

Abstract

Purpose The purpose of this paper is to investigate the impact of participative franchising on performance from the franchisee perspective. In particular, the paper analyses the impact of the franchisee autonomy – in human resource management and marketing decisions – affective commitment to the network and network innovativeness on the franchisee relative performance. Design/methodology/approach A survey answered by 226 franchisees in France allowed to estimate a structural equations model through partial least squares regression analysis to test the hypothesised relations between autonomy, affective commitment, innovativeness and performance. Findings According to the authors’ findings, franchisee’s autonomy in commercial policies, mediated by to franchisor’s ability to innovate and acknowledge innovations stemming from the franchisees, and the affective commitment to the network, emerge as strong determinants of the franchisee’s performance. Research limitations/implications The results confirm the conclusions of other research, but extend and integrate them, providing evidence that the role of participative franchising should not be neglected. Practical implications The results obtained provide evidence about the importance of bidirectional communication instruments in the relations between franchisor and franchisee, and participation tools for the identification, recognition and support to the innovative successful practices developed by franchisees to be quickly implemented by other franchisees in the network. Originality/value This paper looks at franchisee autonomy, affective commitment and innovativeness as potential determinants of franchisee’s performance, being the latter an underexplored topic.

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

“…Although TIP is a new element that we proposed within the EO dimension of innovativeness, innovativeness has previously been documented as having a positive impact on franchisee performance (Colla et al, 2019;Dada et al, 2015;Ghantous and Das, 2018). Thus, our finding is in consonance with the prior studies.…”

“…As seen from the results presented in Section 5.3 and Figure 2, H1a, which proposed a positive influence between TIP and franchisee performance, was supported by the study results. Although TIP is a new element that we proposed within the EO dimension of innovativeness, innovativeness has previously been documented as having a positive impact on franchisee performance (Colla et al , 2019; Dada et al , 2015; Ghantous and Das, 2018). Thus, our finding is in consonance with the prior studies.…”

“…Franchisees bring financial capital, knowledge of geographic locations and labour markets to the system (Tsung-Chi et al , 2014). A franchisee must have better knowledge and understanding of its local business environment, as well as understand the needs of consumers and the potential risks that can be minimized as a consequence of this familiarity (Colla et al , 2019; Ghantous and Das, 2018). Since the five EO dimensions, namely, innovativeness, proactiveness, risk-taking, competitive aggressiveness and autonomy have been studied (e.g.…”

“…For instance, Harel et al (2020) found that managers in small businesses implement innovation promotion through internal processes of collaboration and knowledge transfer, and in creating an organizational culture that promotes innovation. Colla et al (2019) attributed increase in firm performance to technological innovation invested in the business. Similarly, Kim et al (2018) found innovation (i.e.…”

It takes two to tango: A taxonomy of franchise success determinants

“…Studies focusing on the unit level address various determinants of franchise success: the status of the outlet, either independent, franchised or company-owned (Brownson and Morgan, 1998; Litz and Stewart, 1998; Bracker and Pearson, 1986; Anderson, 1984), franchisee characteristics or traits (Cumberland et al. , 2015), the quality of the franchisor–franchisee relationship (Brown and Dev, 1997) and the impact of franchisors' decisions on performance (Colla et al. , 2019; Felicio et al.…”