Guy Basset

Multi‐channel communication: the case of Subway attracting new franchisees in France

Purpose - The purpose of this paper is to highlight the various means of communication available to franchisors in attracting prospective franchisees more effectively than their competitors. In addition, it explores the potential use of Web 2.0 resources by franchisors. Design/methodology/approach - The simultaneous use of various means of communication by franchisors is examined through a case study. The authors have chosen one of the largest franchised chains in the world, which is in the process of expanding its chain of restaurants in many countries, with France being heavily targeted: Subway. Findings - This case study reveals the complementarities of push communication, pull communication, and communication relayed by influencers, along with the development of new means of communication through the use of Web 2.0 tools (Facebook, LinkedIn, YouTube, etc.). Research limitations/implications - This paper contributes to the stream of franchising and hospitality management literature. The limitations encountered stem mainly from the case study methodology. Practical implications - The implications of this research for franchisors relate primarily to the means of communication used in order to appear more attractive in the eyes of potential franchisees. This paper also provides prospective franchisees with a list of sources available to collect useful information in selecting the best-suited franchised chain to join. Originality/value - Few papers have assessed the way new franchisees are attracted from a franchisors perspective. The study of franchisor communication strategy and franchisor use of Web 2.0 resources to bring in new franchisees is indeed original, in comparison with the existing literature.

Uniformity in franchising: a case study of a french franchise network with several franchisees having their own website

In many markets (developed markets and transitional ones), there is a continuous parallel development between online sales and franchising, whatever the industry: retailing and services. The development of online selling in the specific context of franchising has raised some issues. This article aims to explore the impact of the set-up of franchisee websites on network uniformity, which is a key element of franchising. We use a case study to examine different aspects of franchisee websites that can damage concept uniformity. This study involves Intercaves, a French franchise network in the wine and alcohol sector. Maintaining network uniformity when there are various websites set up and run by franchisees entails challenges that are presented in this article within a managerial perspective linked to technical and organizational know-how. The legal perspective in conjunction with intellectual and industrial property law, competition law, and international law is also discussed.

Resale prices in franchising: insights from franchisee perspectives

Purpose The purpose of this paper is to offer a novel perspective on resale pricing in franchising, i.e. from a franchisee perspective, by combining legal and managerial considerations in the European context. The objective is to assess franchisee perceptions regarding resale pricing in their chains. Design/methodology/approach The authors adopt a qualitative approach and use 46 in-depth interviews with franchisees covering retail and service industries in the French market. Findings Many of the interviewed franchisees believe that joining a franchise chain involves respecting the recommended resale prices. For some of the franchisees, in link with the chain uniformity, imposing uniform resale prices throughout the chain represents a strength, because customers who visit different stores within the franchise chain expect to find consistent pricing. Moreover, many franchisees consider that their franchisors have some know-how that they use to set correct resale prices, taking into account the profit margin. Research limitations/implications This research contributes to the literature on resale pricing in franchising, as well as the franchising literature in general, by combining legal and managerial considerations, adopting a franchisee perspective, covering retail and service industries and focusing on French and European markets. Practical implications This research can be viewed by franchise experts, franchisors, franchisees and franchisee candidates as a synthesis of resale price-related legal aspects, adopted practices and potential conflicts in franchise chains in the French market. It also highlights price-related practices to be avoided to prevent potential conflicts. Originality/value The subject of resale pricing in franchise chains is a hot topic, because of its link with customer attraction, chain uniformity, franchisor know-how, franchisee autonomy and the legal dimension.

Franchisees’ Resale Price Policy Facing Legal, Contractual and Professional Constraints: Insights from European and French Perspectives

Abstract Purpose The subject of resale pricing is a hot topic in franchising, due to its links with chain homogeneity and franchisee autonomy. The franchisee is bound by current legislation and regulations, in addition to respecting the franchise contract clauses, to the extent that they are lawful, and potentially opposing contentious professional practices. Focusing on resale prices, we cover these three perspectives, that is, legal, contractual, and professional constraints, using a dual approach based on managerial and legal perspectives and illustrating our arguments using examples from European and French cases. Methodology/approach We illustrate our arguments using examples from European and French cases. Findings We pointed out that the ban on the practice of imposed resale prices presents several advantages (e.g., integrity of franchise chains, chain’s commercial dynamism). Research limitations/implications Our paper contributes to the stream of franchising literature dealing with resale prices. Practical implications Our paper can be viewed by franchisors, franchise experts, franchisees, and franchisee candidates as a synthesis of the impact of European and French regulations on resale price-based practices to be adopted in franchise chains. It also highlights practices to be avoided in order to prevent potential conflicts. Originality/value We use a dual approach based on managerial and legal perspectives to explore resale prices in the context of franchising.

Franchisees’ Websites and Concept Uniformity: A New Challenge for Franchisors

This paper aims to highlight the challenges associated with network uniformity and brand image for franchisors, more specifically when their franchisees set up and manage their own website. This practice has some impact on network uniformity which is a key concept in franchising. We analyze the presence of franchisees on the Internet of 471 networks, both in retailing and services, described in the 2011 franchise directory. We find that only 38 franchise networks are concerned about this practice. We use a qualitative approach based on multiple cases studies of these 38 franchise networks. It points out the different aspects of franchisees’ websites that can damage concept uniformity. Maintaining network uniformity when there are various websites set up and run by franchisees entails challenges to franchisors that are presented in this paper within a managerial perspective linked to technical and organizational know-how. Some insights from the legal perspective are also provided.

Retailing in France: Overview and Key Trends / What's up?

The French retail sector is presented through its main companies as far as the food sub-sector is concerned and through some of its most typical markets for the non food sector. The food retail sector is dominated by six large retail firms which are managed through various types of ownership arrangements. Department stores and variety stores on the one hand and clothing and cosmetic retail markets are detailed as non food retail activities. Then new trends in shopping behaviour, technologies (Internet and mobile phones) and regulation (the Raffarin Act on big store location and other laws on retail pricing) are described in order to show what challenges French retailers will face in the near future. Finally, Porter’s model, with the five strategic forces, and the stakeholder theory are mobilized to explain what could happen if regulation changes, as will probably be the case very soon.

Know-how transfer mechanisms in franchise networks: a study of franchisee perceptions

Know-how is a critical element of franchising, and its transfer is a key issue for franchisors and their staff. The aim of this paper was to analyse franchisees’ perceptions about know-how transfer in franchise networks. Findings of our qualitative empirical study show that franchisees seem to value the mechanisms used in their network, which include formalised processes (the operations manual, online tools), training (initial and ongoing) and social mechanisms (discovery sessions, meetings and committees). Only the effectiveness of on-field consultants is questioned, which leads to important managerial implications. At the theoretical level, the paper contributes to our understanding of franchise operations by providing a franchisee-centred model of how knowledge is created and disseminated in the networks.

The Impact of European Legislation on Franchising: A Focus on Know-How, E-Commerce and Resale Prices

Within Europe, there are very few national laws that regulate the franchise sector (e.g., the Doubin Law in France). However, the European Commission legislation does apply; for instance, the Commission Regulation (EU) No. 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, and the Guidelines on Vertical Restraints—Text with EEA relevance—2010/C 130/01. In this paper, we provide a synthesis of the impact of both texts—the regulation and the accompanying guidelines—on the behaviors and practices of franchisors and franchisees, mostly in terms of know-how, e-commerce, and resale prices. We highlight the elements that franchisors and franchisees have to take into consideration in order to comply with European and French laws and to prevent networks from potential conflicts.

E-commerce opportunities and challenges for franchise chains

The continued creation of websites in the franchise sector is inevitable, no matter whether they are informational or transactional websites. However, with the presence of these websites, there may be a risk that activities in the franchisees’ stores will decrease. Franchisors need to be attentive to the survival of their chains, to the consistency and uniformity of their chains and to potential conflicts with their franchisees or among their franchisees. This chapter deals with the development of websites within franchise chains in Europe. After briefly defining the legal regulations set by the European Union, the chapter considers the use of the Internet as a new marketing channel by studying the reasons why franchise chains need to be present on the Internet and under what conditions. Then the chapter discusses potential issues related to transactional websites opened by franchisors, e.g., encroachment problems and transactional websites opened by franchisees. It examines some solutions adopted by various French franchise chains.