Evelien Croonen

Franchised and Small, the Most Beautiful of All; HRM and Performance in Plural Systems

Franchising is particularly present in industries in which human resources play a vital role. However, little is known about human resource management (HRM) in a franchising context. This study investigates HRM behavior and performance using a sample of 171 units within one plural retailing system. The results lend support to the agency and entrepreneurial perspectives; franchised units have a relatively low HRM intensity but superior HR performance. We also find a negative relationship between unit size and performance, moderated by type of unit ownership. We conclude that when it comes to HR performance, the units that are franchised and small are the most beautiful of all.

Antecedents of franchisee trust

Very little is known about how franchisors can maintain and/or create trust among their franchisees. This article develops a theoretical framework on antecedents of franchisees trust in their franchisors and franchise systems. We integrate franchising literature with literature on trust in other organizational contexts to develop propositions and an overall framework. We argue that a franchisees general propensity to trust combined with its perception of trustworthiness of its franchisor and franchise system determine this franchisees level of organizational trust. We also distinguish three franchise system components consisting of several determinants that influence a franchisees perception of its franchisors and franchise systems trustworthiness.

Antecedents of franchisee responses to franchisor-initiated strategic change

This article uses an in-depth case study of two franchisor imposed change processes in one franchise system to generate propositions on the antecedents of franchisee responses to franchisor-initiated strategic change. The results point to the importance of the level of standardisation in the franchise system on franchisee responses to changes introduced by the franchisor. The franchise system’s standardisation level, as perceived and expected by franchisees, determines the number, nature and level of importance of antecedents of franchisee responses to change. Overall, franchisee expected profitability and trust are the most important antecedents. Additionally, non-economic motivations for running a franchise influence decisions to take-up alternative opportunities and diminish the importance of switching costs. Finally, actions of parties outside the existing franchise relationship may influence franchisee decisions to switch systems.

Trust and Fairness in Franchise Relationships

Very few studies have investigated the key dimensions and consequences of trust and fairness in franchise relationships. Trust and fairness become especially important when a drastic change in the context of a relationship occurs. This paper therefore aims at generating theory about how franchisees’ perceptions of trust and fairness influence their responses toward their franchisors during franchisorled strategic change processes. On the basis of case studies regarding eight change processes in four Dutch drugstore franchise systems, the paper distinguishes a new level of trust in a franchise context: “franchise system trust” and discusses five instruments that franchisors can “institutionalize” in their franchise systems to influence their franchisees’ perceptions of franchise system trust. The results also demonstrate that franchisees’ perceptions of distrust and unfairness result in destructive responses toward the franchisor.

What Makes Franchisees Trust Their Franchisors

A lack of trust of franchisees in their franchisor will negatively affect franchise system performance. However, very little is known about how franchisors can create and maintain franchisee trust. This paper presents a theoretical framework of antecedents of franchisees’ trust in their franchisors and franchise systems. To develop our framework we combined franchising literature with literature on trust in other organizational contexts. We argue that a franchisee’s general propensity to trust together with its perception of the trustworthiness of the franchisor and franchise system determine this franchisee’s level of organizational trust. We distinguish three franchise system components that each entail a set of determinants used by franchisees to evaluate the trustworthiness of the franchisor and the franchise system, the system’s strategic positioning in the market, its operational management and the franchisee management.

Dutch Druggists in Distress: Franchisees Facing the Complex Decision of How to React to Their Franchisor's Strategic Plans

This case focuses on the decisions confronting Marc van der Bilt and his family. At the age of 59, Marc had been a franchisee of the Dutch DA drugstore chain for 23 years and had always planned to remain one until his retirement. In the spring of 2003, however, a change of management at the DA headquarters sparked major strategic changes to the DA chain that placed Marc and his family in a difficult position. They must decide on the future of their family business; should they go along with their franchisors new plans or not?

Understanding strategic interactions in franchise relationships

This paper aims to grasp the complexity of how and why franchise partners as strategic alliance partners interact with each other given March’s exploration/ exploitation trade-off (March 1991). A research model is presented that distinguishes five types of responses that partners may adopt in their relationships. The empirical part consists of a case study which focuses on two ‘strategic change Trajectories’ (SCTs) in a franchise system in the Dutch drugstore industry. During these SCTs the franchisor tried to implement strategic changes in the franchise system. This paper discusses what responses franchisees adopted in a reaction to the introduction of these SCTs by the franchisor, what responses the franchisor adopted toward these franchisees in turn, and why both partners adopted these responses. The paper concludes with adding a new response type to the current response typology, with providing insight in why franchise partners adopt certain responses, and with discussing the implications of this study.

Understanding exploration and exploitation in franchising and other forms of commercial cooperation

The objective of this paper is to present and illustrate a framework for understanding how and why franchise partners and partners in other forms of commercial cooperation deal with the paradox of exploration and exploitation in their relationships through time. Two levels of analysis are distinguished: the level of strategic characteristics of the franchise system and the level of relationships between the franchisor and the franchisees that are part of the franchise system. For the level of the system, it is argued that franchise systems, as any other organizational form, have to balance exploration and exploitation in order to survive and prosper in their environment. The following five strategic characteristics of franchise systems reflect the franchisor’s exploration and exploitation objectives: the positioning of the franchise system, the “hardness” of the franchise system, the system’s entrepreneurial orientation, the degree of strategic participation of franchisees in the system and growth objectives for the system. On the relationship level, the franchise relationship between the franchisor and its franchisees is considered a specific form of strategic alliance. The following variables are distinguished for understanding both franchise partner’s response strategies towards each other: the degree of strategic compatibility between the franchise partners (depending on the above five system’s characteristics), the degree of operational compatibility, the evaluation of available alternatives, and switching costs. Both franchise partners’ response strategies can vary according to two dimensions: constructive versus destructive and active versus passive.

How Do Franchisees Assess Franchisor Trustworthiness?: JOURNAL OF SMALL BUSINESS MANAGEMENT

This study investigates the antecedents of franchisees’ assessments of franchisor trustworthiness. It combines multiple theoretical perspectives to develop a framework that is empirically tested with survey data from 128 franchisees of a Dutch franchise system. The results show that franchisees’ perceptions of a franchisors fulfillment of its functional duties on proactive and reactive quality assurance and strategic management positively influence franchisees’ assessments of franchisor trustworthiness. Moreover, the results show that the impact of the antecedents on franchisees’ trustworthiness assessments varies across franchisees: market competition attenuates the influence of strategic management and reactive quality assurance. Unit performance does not moderate the importance of the antecedents.