Developing brand champions: A franchisee perspective

Abstract

The establishment of a compelling brand lies at the heart of a franchise network’s success. To maintain brand integrity, franchisors rely on franchisees to deliver the brand promise consistently. However, franchisee behaviour is sometimes difficult to manage, impacting negatively on the franchise brand. In adopting an internal brand management theoretical lens, this study provides new insight into the development of franchisees as brand champions. This is achieved through the empirical validation of a model, which encapsulates the dynamics of important antecedent variables (i.e. information generation, knowledge dissemination, the ‘H’ factor, role clarity, franchisee satisfaction, and brand commitment) in creating franchise brand champions. The findings provide significant theoretical and practical implications and lay the foundation for future research in this important research domain.     

Antecedents and effects of free riding in the franchisor–franchisee relationship

This field study investigated contextual antecedents of free riding by franchisees on franchisor brand reputation and effects of free riding on performance in a multinational corporation's franchising network. Structural elements (increased formalization, decentralized decision-making), interactions between franchisor representatives and franchisee dealers, and market-related factors (external competition) were associated with lower levels of franchisee free riding. The findings also indicated that free riding has deleterious effects on franchisee performance. The results support theoretical arguments that both economic and social exchange perspectives are valuable in examining free riding and provide important practical guidance in designing and managing franchise systems.     

Brand equity heterogeneity among strategic groups in service franchising

Independent franchisees work cooperatively with service franchisors to strengthen the franchisor's brand name. However, agency theory predicts that franchisor inputs such as brand names and operational routines might be harmed by franchisees' free riding. In addition, previous literature has addressed the issues of strategic group emergence and performance differences between groups in recent decades. Thus, this study builds upon an emerging symbiotic view of franchising behind agency theory and incorporates a strategic groups level of analysis to investigate whether franchisees have strong incentives to maintain standards as franchisor seeking market penetration. By investigating potential brand equity differences among service franchisors for Taiwanese telecommunications service chains, this study found that different strategic groups exist in service franchising chains. From replication testing, the current results demonstrate that service franchising brand equity heterogeneities exist among franchisors within and across strategic groups. Therefore, this study broadens agency theory's explanation of service franchising.     

Family Ties that B(l)ind: Do Family-Owned Franchisees Have Lower Financial Performance than Nonfamily-Owned Franchisees?

Over the past three decades, franchisee performance has attracted the attention of scholars in both retailing and entrepreneurship. However, to date, research has not investigated whether the type of franchisee ownership influences franchisee financial performance. Family ownership, the most dominant form of firm organization worldwide, ingrains greater focus on noneconomic goals that could, in turn, reduce the financial performance of a family-owned franchisee. Drawing on the tenets of agency theory undergirding the franchising and family business literature, we examine whether family-owned franchisees have lower financial performance than nonfamily-owned franchisees. Using data from the 2007 Small Business Owner survey and propensity score matching, we observed that family franchisees generated at least 6.7% lower sales per employee than nonfamily franchisees. The inferences are consistent across two additional samples and robust to additional performance outcomes and specifications. Overall, this research provides a novel empirical examination of the influence of family ownership on franchisee financial performance and has managerial implications for both franchisors and franchisees.     

Brand and performance signals in the choice of franchise opportunities

When choosing a franchise chain, potential franchisees must incorporate into their decision process the signals of franchise chain quality being sent to the market by the franchisor. Some of these signals along with potential franchisees' choices of franchise chain are analyzed. The results show that brand value and franchisee performance were the key signals used by Spanish franchisees during the period 2002 through 2008, when deciding to open a franchise outlet. The aim of this study was to contribute to strengthening the relationship between entrepreneurship and franchising in Spain from an empirical viewpoint.     

电商化转型零售商的品牌权益提升机制与路径研究——基于双渠道品牌形象驱动的视角

网络零售强烈冲击下的国内传统零售业面临行业生存危机,电商化转型已经成为行业的必然发展趋势。文章通过界定电商化转型零售商及其品牌形象、品牌权益的概念,提出其“实体-网络”双渠道品牌形象结构的概念模型,并进一步构建其“双渠道品牌形象——品牌权益”驱动机制模型,以结构方程结合信度分析、效度分析等方法进行了实证分析。研究发现：电商化转型零售商的实体品牌形象各维度变量对网络品牌形象的对应维度变量都具有非常强的直接积极影响（即支撑效应）,价值维度、价格维度、供应维度的支撑效应由强至弱;实体品牌形象各维度变量对品牌权益产生明显的总积极影响（即提升效应）,价格维度、价值维度、供应维度的提升效应由强至弱,但供应维度无直接影响;网络性品牌形象各维度变量对品牌权益产生明显的直接积极影响（即提升效应）,供应维度、价格维度、价值维度的提升效应由强至弱。     

Conceptualizing the Franchise System Quality (FSQ) Matrix

Abstract

This empirical study provides some exploratory evidence to the proposed Franchise System Quality (FSQ) Matrix. This is the first study to investigate how franchisees perceive the importance and adequacy of the franchisor-provided services within a franchise system. Using these two dimensions as anchors, the FSQ matrix is conceptualized with four distinct profiles. The analysis of survey responses of 185 Taiwanese franchisees strongly confirms the validity of the four-cell matrix indicating significant differences between them. The results also yield a highly significant comparison between system quality permutations with franchisee performance variables and behavioral perceptions. These results show that franchisees with better performances are worthy of more support and assistance from franchisors. Those franchisees that are identified with highperceived importance of the FSQ matrix have a stronger desire for autonomy.     

Antecedents of early terminations in franchising: franchisor versus franchisee cancelations

Franchisors capitalize on franchisee entrepreneurial capacity to grow. However, enabling franchisees to develop their ventures may damage system consistency. This dilemma makes conflict particularly prevalent in the field of franchising. Nevertheless, prior research has reported an incomplete picture of factors leading to serious disagreement and premature termination in franchise partnerships. We address this gap, first, by adding the entrepreneurial autonomy of franchisees as a relevant but underexplored source of conflict and, second, by providing a more fine-grained analysis of franchisors’ versus franchisees’ drivers of termination. Specifically, we focus on the controversial issues of pricing and local advertising policies and analyze how expanding franchisees’ entrepreneurial autonomy in these decision areas is related to contract terminations depending on who ended the relationship (the franchisor or a franchisee). The study also highlights less controversial requirements and conditions (e.g., upfront investments, franchisor experience …) that may reduce early terminations. Our empirical objectives are met by using survey data from a sample of franchisor companies. The results show how the performance outcomes of entrepreneurial autonomy differ depending on the decision area in which it is exercised. Results also throw light on the consequences of various critical franchise policies that may be masked if both types of termination (franchisors vs. franchisees) are considered together.     

The impact of brand equity on brand preference and purchase intentions in the service industries

The antecedents of brand equity are considered to be brand attitude and brand image, and the consequences of brand equity are considered to be brand preference and purchase intentions. This study concentrates on service brands, selecting 18 from 3 service categories. A structural equation model is presented. Not only does it show a good fit with the research constructs but also the relationships between brand image and brand equity, and brand attitude and brand equity. The impact of brand equity on customer preference and purchase intentions is confirmed as well, which tends to validate the proposed research framework.     

The Effect of Brand Engagement and Brand Love upon Overall Brand Equity and Purchase Intention: A Moderated –Mediated Model

Abstract

In their quest for retaining or enhancing their overall brand equity, firms engage with their customers. This study investigates if brand engagement blossoms in brand love and the combined effect of brand engagement and brand love upon overall brand equity and purchase intention. A two stage analysis was done on data collected from 548 respondents through a self administered questionnaire. In the first stage the measurement model was checked for reliability and validity, while in the second one, the strength of the relationships was ascertained in the structural model. The study enables an in-depth understanding of the antecedents of brand equity. It provides valuable theoretical insights on the determinants of brand equity formation. At the same time, it explores the effect of socio demographic variables like gender and usage. Brand love and overall brand equity mediate relationships. This study proposes a new branding model by simultaneously integrating variables that have been previously researched upon; brand love, brand experience, overall brand equity and purchase intention as one comprehensive model. This paper confirms that brand love and brand engagement are second order constructs and important brand mix elements. Brand engagement and brand love relationship is moderated by usage and gender.     

The Impact of Product-Country Image and Marketing Efforts on Retailer-Perceived Brand Equity: An Empirical Analysis

Although both product-country images (PCI) and firm assets such as brand equity have been extensively studied in separate contexts, we know very little about the combined performance effects of these two important constructs in international research. Extant research has investigated brand equity primarily from a consumer perspective, but rarely from the point of view of a retailer. Retailers represent the ultimate participants in the value chain selling the product to consumers. They have the ability to significantly influence consumers’ evaluations and purchase decisions. Based upon existing literature documenting the contributions of PCI and marketing activities on brand equity, this study extends these findings by investigating their effects on retailer-perceived brand equity (RPBE) and ultimate brand profitability performance. Results indicate that both marketing activities and PCI affect retailer-perceived brand equity with PCI also strongly and positively influencing brand profitability performance.     

The Role of Trust in Understanding the Impact of Social Media Marketing on Brand Equity and Brand Loyalty

Abstract

In this era, social media platform is integrated into the marketing strategy. This new technology sets out new mechanisms and communication tools that companies can rely on to interact and engage with actual and potential customers. This study aimed at exploring the impact of social media marketing activities (SMM) on brand loyalty via brand trust and brand equity. Based on an online survey of 287 users who follow telecommunications companies on social media located in Egypt, data was collected and analyzed using structural equation modeling. The results revealed that SMM activities comprise only three dimensions; trendiness, customization and word-of-mouth. These attributes of social media marketing directly influence brand loyalty and indirectly influence brand equity mediated by brand trust. The study emphasis the role of trust and provide guidance toward measuring the effectiveness of social media marketing.     

The Effects of Standardization and Trust on Franchisee's Performance and Satisfaction: A Study on Franchise Systems in the Growth Stage

Franchise systems aim to capitalize on both economies of scale and the benefits derived from localized operations. Although franchisees can be considered small businesses with some independence and local knowledge, compliance with system standardization may be critical to achieving scale benefits, as well as realizing and then maintaining the desired image during the growth stage of the franchise life cycle. However, standardization requirements from the franchisor demand that franchisees make specific investments in the system, which make franchisees more vulnerable to the franchisor. Therefore, whether a franchisee can trust the franchisor becomes an important factor that facilitates the relationship between standardization requirements and franchisees' overall sales and service performance in the market. This research focuses on franchisees in a growing franchise system and examines how the standardization requirements, trust in the franchisor, and the interaction term affect the sales and service performance of a franchisee and ultimately the franchisee's satisfaction. The findings support the hypotheses that, first, the standardization requirements positively affect both sales and service performance. Second, trust not only has main effects on satisfaction and performance constructs but also moderates positively the relationships between standardization requirements and sales/service performance.     

A longitudinal examination of the effects of retailer–manufacturer brand alliances: The role of perceived fit

Abstract

One resource that has been identified as a valuable source of competitive advantage is the equity associated with an organisation's brands. Organisations devote considerable resources to developing strategies that allow them to build and/or maintain strong brand names. This study investigates brand alliances between retailers and manufacturers. The role of perceived fit between the partnering brands is explored. In addition, the study examines the influence that retailer–manufacturer brand alliances have on: retailer equity; manufacturer brand equity; the intention of consumers to frequent the stores of the retailer involved in the brand alliance (shopping intention); and the intention of consumers to purchase products from the manufacturer involved in the brand alliance (purchase intention).     

An Empirical Investigation of Brand Equity: A Cross-Country Validation Analysis

ABSTRACT

The purpose of this article is to propose and test a model in order to better understand brand equity. The goal of this research is to identify the drivers and determine how they influence brand equity performance in the researched industry in order to develop a more effective brand strategy. Quantitative data collected are used to test a model of brand value in the context of the food industry. The findings of this research provided evidence that the customer-based brand equity model can be applied to the food industry context and be used to guide marketing activities internationally. Brand awareness has a positive influence on brand associations and perceived quality. Brand associations have a positive influence on brand loyalty. Finally, brand loyalty, perceived quality, and brand associations all have a positive effect on brand equity. This study contributes to the scarce international brand equity literature by testing the proposed model using data from a sample of consumers in two European countries.     

Influence of franchisee selection criteria on outcomes desired by the franchisor

Agency theory suggests that an efficient contract between a franchisor (principal) and a franchisee (agent) could be established by the use of selection criteria that would screen prospective franchisees based on their likely future outcomes desired by their franchisors. Franchisors can use franchisee selection criteria as a key input control to enhance the outcomes of their future franchisees. This article examines the relationship between key franchisee selection criteria such as franchisees’ financial capability, experience and management skills, demographic characteristics, attitude toward business dimensions (perceived innovativeness, desire for personal development, seek work-related challenges, personal commitment to the business, and business risk-taking), and key measures of outcomes desired by franchisors (perceived cooperation, satisfaction with the business decision, and franchisee opportunism). The findings show that certain franchisee attitudes toward business can be used as an effective input control strategy by franchisors because they explain a substantial portion of the variance in franchisees’ outcome desired by franchisors.     

Criteria used in the selection of franchisees: an application in the service industry

The service industry is one of the greatest driving forces behind the growth of franchising in many countries. The aims of this study are to identify the characteristics of the franchisee profile preferred by franchisors in the service industry and to show how the simulation of franchisees with conjoint analysis constitutes a powerful tool for the correct selection of franchisees by franchisors. Criteria that franchisors in the service industry look for in franchisee candidates are ranked by importance using conjoint analysis; a decomposition methodology that is rarely used in this field. The value of the paper is significant as it provides a practical framework for franchisors for the selection process of franchisees when choosing from a group of potential franchisees.     

Antecedents leading to perceived franchise support

Abstract

Franchising is an important part of the U.S. economy. According to the International Franchise Association (IFA), franchising provides 9.0 million jobs and pays out 351 billion dollars in wages and benefits annually (2016). This study examines franchise relationships in the context of building franchisees’ perceptions of support from the franchisor. The literature was examined to determine if and what support provided by the franchisor has a positive impact on the franchisee. We examine four dimensions of organizational climate (i.e., initiating structure, leadership consideration, autonomy, and reward orientation), brand value/recognition and franchisee’s perception of the quality of the franchisor’s advertising as predictors of perceived franchise support. This study indicates there is a positive and significant impact between three types of organizational climate (i.e., leadership consideration, autonomy, and reward orientation). In addition, a positive impact to brand value recognition on perceived franchise support and a negative effect on initiating structure.     

An Empirical Analysis of Franchisee Value-in-Use, Investment Risk and Relational Satisfaction

An exchange perspective of franchising recognizes the important role that both the franchisor and franchisee assume in developing and maintaining sustainable relationships. However, should franchisees not perceive value in the quality of provided products or services, some incentive misalignment between agent and principal is likely (e.g. free riding, non-compliance with system standards), potentially resulting in greater perceptions of financial risk, diminished levels of franchisee satisfaction, reduced unit performance and conflict ( [Harmon and Griffiths, 2008] and [Kaufmann and Dant, 1998] ). A greater understanding of franchisee perceptions of value is very important if ongoing satisfaction in the franchising relationship is the goal. This paper, therefore, makes a significant contribution to such an understanding by empirically testing the dimensions of value that influence franchisee perceptions of risk and relationship satisfaction. Moreover, we make important comparisons across gender, the results of which provide rich information. In theoretical terms, we advance the literature in the context of value and franchising and, in practical terms, the results, by managing for performance (financial risk and relationship quality), assist franchisors in developing, delivering and managing what is of value to their franchisees. Furthermore, the findings of this study provide a solid platform for future research in this area.