Value co-creation through knowledge exchange in franchising

2002

The paper examines the role of franchisor's and franchisee's knowledge assets as determinant of decision structure in franchising networks. Based on the property rights approach residual decision rights must be allocated according to the distribution of intangible knowledge assets (know-how) between the franchisor and franchisee. Our analysis derives the following hypothesis: The more important the franchisor's system-specific assets for the generation of residual surplus, the more residual decision rights are assigned to the franchisor and the higher is the degree of centralization of the franchising network; conversely, the more important the franchisee's outlet-specific know-how for the creation of residual income, the more residual decision rights are allocated to the franchisee and the higher is the degree of decentralization of the franchising network. This property rights hypothesis is tested in the Austrian franchise sector. This study presents the first ...

2010

Although the franchise network has been known for more than a century, in the last twenty/thirty years a rapid growth has been observed in terms of the number of newly established systems of this kind. The observation merits attention since franchise networks appear also in these fields of business, in which they had so far been regarded as unattractive for this kind of economic cooperation between enterprises. Meanwhile, contemporary tendencies in the shaping of principles of cooperation between franchise partners point also at popularization of particular regulations governing its operations, which make the whole system diverse when compared to traditional networks of this kind. The implementation of novel solutions within the scope of acquiring knowledge about environment may be pointed at in this respect.

2016

In Brazil, franchising invoices R$55 billion/year; there are 71,950 franchised units of 1,380 chains. Entrepreneurs prefer franchising for the support and lower firm mortality, especially during these times of financial crisis. The Resource-Based View regards resources, capabilities and expertise to create competitive advantages. Which resources and competences can provide franchising innovation? and how can one sustain the competitive advantages of these innovations? The propositions reveals: (P1) Professionalization of the franchise chain can generate advantages in terms of innovations; (P2a,b) Franchised entrepreneurs can generate innovations and use knowledge management to spread innovation; (P3) Networking generates innovations in franchises; (P4) M&A within the chain create competitiveness that generate innovations; (P5a,b) An organizational culture that encourages entrepreneurship generates innovation. Key-words: Franchising, Entrepreneurship, Innovation. RESUMEN: En Brasil, ...

Knowledge and Process Management, 2010

In this paper, we try to explain the use of knowledge transfer mechanisms in franchising firms by applying the knowledge-based view of the firm that integrates results from the information richness theory. Starting from the information richness theory we argue that the degree of tacitness of system-specific knowledge determines the information richness of the knowledge transfer mechanisms of franchising firms. We examine the following hypotheses: (1) the franchisor uses more knowledge transfer mechanisms with a lower degree of information richness (such as email, intra- and internet), if the tacitness of system-specific knowledge is low, and (2) the franchisor uses more knowledge transfer mechanisms with a higher degree of information richness (such as training, seminar, meetings, visits), if the tacitness of system-specific knowledge is high. We test these hypotheses by using data from 83 franchising firms in the Austrian franchise sector. The data provide partial support for the hypotheses. Copyright © 2010 John Wiley & Sons, Ltd.

2008

The business to business (b2b) relationship literature shows that the features of business relationship such as control, support, cooperation and power act a little differently in franchise business. Information on, and identification of the actions in the franchise business relationship, that can increase or diminish trust and commitment between both partners, is also scarce. Furthermore, how can these actions contribute to, solidify relationship; attaining over all business development, adding value, achieving synergy, and competitive advantage? This paper will briefly review literature on the relationship of the franchisor and franchisee, investigating its elements, actions that deteriorate it and providing a background that how and why the conflicts occur. From this it will is hypothesised that certain actions of the parties in relationship and suggest a generic conceptual model that be adopted and applied by both partners in order to increase cooperation and work together for over all business growth. This will help to add value, achieve competitive advantage and growth. This model could be applied in any environment. This paper will act as catalyst for development of a model for franchise business introduction and growth in CIS.

The TQM Journal, 2021

PurposeThis study aims to examine the influence of institutions and technology on value co-creation outcomes. These outcomes include strategic benefits, value-in-context and novel operant resources. The problem in this study is analyzed based on the perspective of service-dominant logic or the service ecosystem.Design/methodology/approachPrimary data collection was carried out using a questionnaire through an online survey. All indicators are measured using a seven-point Likert scale. The exploratory factor analysis technique was applied to test the construct validity. We obtain data from 358 McDonald's restaurant consumers. Furthermore, nine hypotheses were tested using simple and multiple linear regression.FindingsThe results of this study proved that the nine proposed hypotheses were not rejected. Technology has been shown to significantly influence institutions, and both institutions and technology have also been shown to influence strategic benefits. Furthermore, institutio...

Journal of Business & Industrial …, 2008

The paper seeks to develop a conceptualization of franchisee perceived relationship value (FPRV), defined as the trade-off between perceived net worth of tangible and intangible benefits and costs to be derived over the lifetime of the franchisor-franchisee relationship, as perceived by the franchisee, taking into consideration the available alternative franchise relationships.

Asia Pacific Journal of Marketing and Logistics, 1998

Links the literature on interorganizational networks and relations research on franchising in an attempt to address when to opt for franchising and how to manage franchises. Asserts that franchise systems are strategic network organizations and pinpoints what that means and how such a system can be managed. Looks at the social theory of structuration and applies it to franchise management. Focuses on six franchise networks in Germany – McDonald’s (fast food), OBI (DIY superstore), Anfina (estate agents), Schulerhilfe (provides tutoring), Computerland (selling and servicing computers), and Hyper Services (a service provider). Finds differences among their network organization, particularly in the relationship with the centre firm. Indicates that network firms require very careful interpersonal relationship management which should be monitored, and that leadership by the centre firm cannot be assumed to control network processes.

International Small Business Journal, 2012

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 ...

Business and Economic Research, 2021

The purpose of this paper is to extend insight about processes and routines needed for franchise replication and makes an important contribution to understanding ways through which dynamic capabilities are created. Based on a grounds-up study, this paper utilizes a storyline approach (Miles & Huberman, 1994) to present interview data obtained from interviews with elite informants (IEIs) of the host company and its archival data. Evolution of capabilities, both substantive and dynamic, are captured in the findings section. Of the seventeen interviews, seven subjects were location heads and ten corporate executives. Interviews with corporate executives included questions pertaining to their functional specialty as well. Finally, implications for future research and practice are discussed.

Journal of Business Venturing, 1996

Purpose – Involving customers to create value is an important strategy for firms to compete, satisfy customized demands and gain competitive advantage. This potentially important alternate viewpoint for strategic management aims to widen avenues of business opportunities. Design/methodology/approach – To date in the strategy discipline, profuse research has been undertaken to identify the typology of resources/capabilities that explain firm’s unique competitiveness and superior performance. However, very little research has been undertaken to explain how firms attempt to create customer value, how resources become valuable for customers maximizing benefits and how investments in dynamic capabilities allow the firm to (co) create value. This paper is intended as a contribution to the ongoing conceptual development of resources and capabilities (RC) through the lens of value co-creation and provides initial guidance for future empirical studies. Findings – The authors organize and integrate the diverse body of past literature relating to RC and, in doing so, develop a synthesized conceptual model. A critical interpretation of previous literature relating to RC and co-creation reveals how little attention has been paid to these connections and what exists is only partial. Originality/value – The authors develop a first initial constructing of the past theory which is subsequently refined and strengthened into a conceptual model advancing on theoretical development in the field.

Proceedings of ANZMAC …, 2009

Essentially, the degree to which the franchising relationship is effective in facilitating a mutually beneficial exchange depends, to a great extent, on the behaviour of the franchisor. Just as service providers provide intangible products in order to orchestrate viable solutions for customers so, too, the franchisor is the service provider of business solutions for the franchisee (customer). This paper documents the first exploratory phase of research that investigates service quality in franchising (FRANQUAL). In doing so, five franchising quality dimensions (e.g., mechanics, expertise transfer, simplicity, openness and equity) result from in-depth interviews with 22 franchisees.

Journal of Management & Governance, 2011

In this paper we develop a knowledge-based view on the choice of knowledge transfer mechanisms in franchising that integrates results from the information richness theory. Starting from the information richness theory we argue that tacitness of system knowledge, operationalized by codifiability, teachability and complexity, determines the information richness of the knowledge transfer mechanisms of franchising firms. We examine the following hypotheses: (1) If the franchisor’s knowledge is characterized by a high degree of codifiability and teachability and a low degree of complexity, knowledge transfer mechanisms with a lower degree of information richness are used; (2) If the franchisor’s knowledge is characterized by a high degree of complexity and a low degree of codifiability and teachability, knowledge transfer mechanisms with a higher degree of information richness are used. We test these hypotheses by using data from 52 franchising firms in the Austrian franchise sector. The data provide support for the hypotheses.

RAM. Revista de Administração Mackenzie, 2016

Purpose: The objective of this research is to understand the actions undertaken by Franchisee Associations (FAs). We aimed to: 1. identify the role played by FAs regarding their relationship with franchisors; 2. understand conflict procedures alongside with franchisors (by means of FAs); and 3. identify FA's abilities to play a relevant governance role in franchisee-franchisor relationships. Originality/gap/relevance/implications: This research complements the researches of Dandridge and Falbe (1994), Cochet and Ehrmann (2007), Lawrence and Kaufmann (2010, 2012), bringing up other perspectives regarding practices in managing relationships, and governance methods proposed by the FA, which are aspects not deeply analyzed in other FA studies. Key methodological aspects: Qualitative research with multiple case studies involving data triangulation. The sample of this study comprised the franchise chain Skill Idiomas, and the interviews involved four Directors, six Franchisees and the...