Anna Watson

Managing the Franchisor–Franchisee Relationship: A Relationship Marketing Perspective

Since the emergence of the relationship marketing paradigm, researchers have increasingly considered why some efforts at relationship marketing are more successful than others. This article explores this subject within the context of a particular form of relational exchange—the franchisor–franchisee relationship. Though the importance of good franchisor–franchisee relations have long been recognized as critical to the success of franchise systems, little attention has been given as to how this can be achieved. This article, by applying a relationship marketing framework, seeks to provide new insights into those factors that influence relationship quality and considers how relationships may evolve over time. The case analysis suggests that the quality of the franchise relationship is impacted by a number of factors but that effective communication is critical in ensuring shared values and, therefore, a relationship characterized by trust and commitment. Leadership also emerges as being very important in shaping the relationship.

Consumer attitudes to utility products: a consumer behaviour perspective

Introducing consumer choice was one of the key motivations underpinning the various public utility privatisations of the 1980s and 1990s, along with enhancing the quality of service provided to consumers. This was especially the case in electricity supply, where a timetable for the introduction of competition was included in the original legislation. However, evidence from the industry regulator suggests that consumers are proving reluctant to exercise choice, despite the intensity of the supply companies’ preparation and marketing campaigns. Indeed, a recent poll by MORI suggests that the number of consumers who have changed suppliers is approximately half that predicted by the industry. This paper, drawing on consumer behaviour theory, seeks to explain the reasons behind the apparent reluctance of consumers to change electricity provider, utilising market research data from both the UK and Germany.

Franchising as a small business growth strategy : A resource-based view of organizational development

Not only are most franchisees themselves small businesses, but so are many franchisors, particularly in the formative years of their franchise businesses. High turbulence and attrition rates in the formative years of franchise businesses result in an industry profile whereby, at any one time, around half of all franchise systems are less than five years old with less than 10 outlets. The question arises: how do successful franchise organizations plan their human capital development in order to accomplish successful growth? An adjunct to this question is the role of franchisees who, while not totally independent in the sense of the conventional small business person, certainly do not see themselves as conventional employees either, and have certain expectations of participation in the process of which they are an integral part. This exploratory article uses case study material from a number of ‘exemplar’ franchise companies in the development of a resource-based view of organizational development. The article should hold considerable interest, not only for academics interested in franchising, but also for those examining fields such as small business strategic management, innovation and intangible asset growth.

Toward a model of franchisee entrepreneurship

This study provides a deeper understanding of the relevance of the entrepreneurship phenomenon to the franchisee context. A number of studies have echoed that the franchisee plays an important role in the generation of new ideas and innovations for the franchise system but we still do not know how franchisees maximize their entrepreneurial behaviors without jeopardizing the desires for standardization and uniformity, which are building blocks of franchising. We address this research question, using evidence from multiple case studies of UK-based franchisees. The study reveals patterns that were used to develop a theoretical model, which demonstrates the utilization of different forms of formal franchisee networks for maximization of entrepreneurial behaviors through acquisition of relational and informational capital, intra-system competition, and franchisee learning. This study extends the literature on franchising and entrepreneurship, and offers important managerial implications for practitioners. Future research directions are discussed.

Implementing ‘e-Value’ Strategies in UK Retailing

Purpose – This paper aims to examine the current strategic landscape of UK “bricks and clicks” retailers. The main focus of this work is to consider how e-commerce may provide competitive advantage via an insight into the current strategies employed by UK retailers. Design/methodology/approach – The paper uses both secondary and primary data analysis to explore its research questions. The paper begins with an overview of the e-strategy literature and then goes on to examine the key areas of e-value creation for bricks and clicks companies. Next an analysis of the results of a survey of the UKs top 500 retailers tests the existing literature and provides new evidence of emerging e-strategies. Findings – The data analysis in this research reveals significant gaps between theory and practice and leads to the development of a new model of business “e-value-added”. Research limitations/implications – It is difficult to generalise the findings from this survey, given the small number of respondents. Further in-depth qualitative research is needed to enable us to understand better the organisational issues around e-commerce development and implementation. Practical implications – It is suggested that, in order to exploit the internet to its full potential, legacy retailers need to analyse a variety of situational antecedents in order to identify e-value creation opportunities. In addition, they must consider whether integration or separation with bricks and clicks operations will deliver the best solution in each value-adding interface. Originality/value – This research offers a new insight into current e-tail strategies for bricks and clicks businesses, and as such is likely to be of interest to academics and practitioners alike.

Entrepreneurial Orientation and the Franchise System : Organisational Antecedents and Performance Outcomes

Purpose – The purpose of this paper is to understand the franchisors perception of the role of entrepreneurial strategic orientation (EO) – innovative, risk‐taking, and proactive actions – within the special case of franchised firms, given the opposing forces for standardisation/uniformity and system innovation/adaptation.Design/methodology/approach – A cross‐sectional research design, involving a mail questionnaire survey, was employed to collect data from a sample of franchisors operating in the UK. The hypotheses specified in the study were tested using a path model.Findings – The results show that for franchise organisations, EO is positively related to performance. The recent meta‐analysis conducted by Rauch et al. also demonstrated that the correlation of EO with performance is fairly large (r=0.242). This correlation is consistent with the significant value reported in the study of 0.234. In addition, franchise system support structures were found to be important in fostering EO within the organis...

Franchising, retailing and the development of e‐commerce

Franchising has shown considerable growth in recent years and in advanced economies, such as the USA and the UK, and currently accounts for approximately one‐third of all retail sales. It would seem, therefore, that franchising and retailing represent a fruitful partnership, though there has been little research as to why this should be. In this article the authors seek to address this situation by considering those characteristics that make retailing particularly suitable for franchising, through an examination of the UK context. Given the changing nature of the retail industry and the advent, in particular, of e‐commerce, consideration is given to the future for retail development through franchising.

The Effect of Entrepreneurial Orientation on the Franchise Relationship

This article aims to understand how the entrepreneurial orientation (EO) of the franchise system may impact franchisor–franchisee relationship quality, given the conflicting forces for standardization/uniformity and franchisee desire for autonomy. A cross-sectional research design, involving a mail questionnaire survey, was employed to collect data from a sample of franchisors operating in the UK. The hypotheses specified in the study were tested using regression (including moderated regression) analyses. The results revealed that EO was significantly and positively related to relationship quality (as perceived by the franchisor). In addition, the recruitment of entrepreneurial franchisees was found to have a positively significant impact on relationship quality. The structural support systems used by franchisors to encourage franchisee entrepreneurial activities were not found to moderate the relationship between EO and relationship quality. The results suggest that systems with EO and entrepreneurial franchisees may enjoy better relations.

Public perceptions of franchising in Britain: releasing the potential

In the two decades prior to 2000, the UK franchise industry showed substantial growth. Subsequently, however, this growth appears to have reached a plateau, with growth of less than 1 per cent. Franchisors suggest that the biggest barrier to growth is a lack of suitable franchisees. One possible reason for the dearth of potential franchisees is a lack of public awareness of franchising and the opportunities it affords for both self‐employment and small business development. This paper examines, therefore, public perceptions of franchising in the UK; how well the concept is understood, how it is perceived and the policy implications. The study is based on a sample of 1,257 members of the public surveyed in five city centres in the UK. The results reveal that approximately a fifth of those questioned had no comprehension of the term franchising, while a further third showed limited understanding. Only a tenth demonstrated a clear grasp of the term. The paper concludes that, if franchising is to continue to grow and to achieve its potential for the creation of self‐employment and the growth of small firms, public awareness needs to be raised and the image of the sector improved.

Entrepreneurial tendencies in franchising: evidence from the UK

Purpose – In spite of the important contributions of franchising to many economies, it remains unclear whether it truly provides a scope for entrepreneurial tendencies to flourish amongst franchisees. The purpose of this paper is to examine the debate surrounding the franchisee as an entrepreneur from the perspectives of the main contributors within the UK franchising sector, franchisors and franchisees, by analysing their entrepreneurial tendencies and the franchisee selection process. Design/methodology/approach – The paper is based on an empirical study using a focus group and a survey approach. Findings – The findings from this study demonstrate that franchisees have similar levels of entrepreneurial tendencies to franchisors. The results further indicate that franchisors appear to value entrepreneurial personalities within their franchised outlets, as demonstrated by their franchisee selection process. Originality/value – By providing an indication of the extent of the franchisee’s entrepreneurial te...