Frontiers of Entrepreneurship Research
1997 Edition

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PARADOXES AND REACTION PAIRS IN FRANCHISING

Matti Koiranen, University of Jyväskylä, Finland
Kimmo Hyrsky, University of Jyväskylä, Finland
Mika Tuunanen, University of Jyväskylä, Finland


INTRODUCTION
LITERATURE REVIEW

Advantages from Franchisee View
Disadvantages from Franchisee View
Entrepreneurial Personality Traits

METHODOLOGY AND SAMPLE

TABLE 1: Paradoxes of Franchising as Described in Past Literature

RESULTS

Perceived Advantages
Perceived Disadvantages
Self-Evaluation of Entrepreneurial Characteristics
TABLE 2: Perceived Franchisee Advantages
TABLE 3: Perceived Disadvantages
TABLE 4: Self-Evaluation of Entrepreneurial Characteristics
Summary of Dimensions: Paradoxicalness
TABLE 5: Paradoxical Dimensions
TABLE 6: Behavioral Features of Franchisees

DISCUSSION
IMPLICATIONS
REFERENCES

ABSTRACT

The present study sets out to describe paradoxes and reaction pairs in business format franchising by examining perceived advantages, disadvantages and entrepreneurial characteristics of Finnish franchisees. Paradoxes are tenets or propositions that are contrary to received opinion. They are also statements or sentiments that are seemingly contradictory, self-contradictory, or opposed to common sense. A reaction pair is defined as a simultaneous existence of one domaining phenomenon or development and the opposite, counteracting, or reverse phenomenon or development.

In our quantitative study of 686 respondents, the advantages regarded by franchisees as the most relevant were: "Known Company Name or Trade Mark," "Proven Business Concept," "Economics of Scale," "Franchisor Support," "Greater Job Satisfaction" and "Opportunity for Family Business". The perceived disadvantages included: "Fees," "Excessive Working Hours," and "Contractual Issues". Furthermore, it appeared that franchisees regarded themselves as customer-oriented people who shouldered responsibility for their own actions and really wanted to be successful, although many were not going to expand their current businesses.

The results displayed the highly dynamic nature of a satisfactory franchisor-franchisee relationship. It was found that support given by the franchisor may gradually lose some of its value if it is not consistently updated and renewed. Thus, for instance, franchise fees might start to become, first a source of dissatisfaction, and later even a potential source of conflict. Paradoxes and reaction pairs were discovered in the empirical analysis of the advantages, disadvantages, and characteristics. The contradicting results implied, for instance, that an original advantage may gradually turn into a disadvantage.

 

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