Chapter Listing | Return to 1997 Topical Index


RESULTS

Perceived Advantages

The greatest advantages (i.e. most agreed statements) perceived by the franchisees were: "Recognized trade name," "Proven business concept," "Economics of scale," "Ongoing franchisor support," "Opportunity to provide family business" and "Greater job satisfaction". The smallest advantages (i.e. most disagreed statements) were: "Optimal start-up investment," "Training for management" and "Overcomes obstacles".

The results of a three-factor analysis are given in Table 2. The first factor consisted of six variables and was named "Rewarding Work". The variables of "External Stimuli and Support for Development" were grouped into the second factor. The third factor were comprised of five variables related to "Less Difficult Start-up".

Perceived Disadvantages

The biggest disadvantages perceived by informants were: "The regular franchise fees are too high," "There are no existing franchise laws," "There is too much work," "Franchisor support is too expensive," "Transfer and termination of contract is difficult" and "Another outlet of the same chain is or may come too close". On the other hand, the smallest disadvantages were: "Too limited risk-taking" and "Lack of personal responsibility".

The results of a three-factor analysis are displayed in Table 3. The first factor was named "Reduced Autonomy and Responsibility," which consisted of eight variables. Four variables grouped into the second factor called "Contract and Partner Issues". The third factor was fully interpretable and included three variables, all related to payments. This factor was simply named "Fees".

Self-Evaluation of Entrepreneurial Characteristics

The following key statements evaluating entrepreneurial personality characteristics emerged among franchisees. The most agreed statements were: "I want to succeed," "I consider myself customer-oriented," "I like to take responsibility," "As an entrepreneur, I am constantly learning something new" and "As an entrepreneur, I am very self-confident". In contrast, the five most disagreed statements were: "I want my children to become entrepreneurs," "There is no way I could be a salaried employee," "Some day I will be a franchisor," "I benefit more from franchising than my franchisor," "I will have more outlets in five years time".

TABLE 2
Perceived Franchisee Advantages

One paradoxical feature in the descriptive results was the fact that even though many franchisees claimed to want success, they neither intended to increase their number of outlets nor wanted to become franchisors. Instead of pursuing profit and growth, they were oriented to providing family income.

Factors with Eigenvalues greater than one were extracted. Nine factors emerged. The first four were interpretable. The first factor comprised three variables and was called "Conformists". The second factor was dominated by three variables indicating a person´s ability and willingness to look for new options. Accordingly, it was called "Lookers-Around". The third factor, "Opportunists", included five variables. Six variables were grouped into the fourth factor named"Self-Confident and Self-Directed". These factors are shown in Table 4.

TABLE 3
Perceived Disadvantages

We found no significant differences in perceptions of advantages and disadvantages between those who had previous self-employment experience and those who had not. In addition, we discovered that the longer the franchisee experience, the stronger the franchisees tended to experience the disadvantages of franchising, and the weaker they experienced the advantages of franchising.

The following categories of entrepreneurial characteristics were discovered on the basis of the respondents´ self-evaluations. These different types are not deterministic in their nature. They are also not always mutually exclusive, nor are the lines between them always necessarily sharp. Moreover, they are changing according to the gradually maturing franchiseeCfranchisor relationship:

TABLE 4
Self-Evaluation of Entrepreneurial Characteristics

 

Summary of Dimensions: Paradoxicalness

The dimensions of perceived advantages and disadvantages were as follows:

TABLE 5
Paradoxical Dimensions

Factor Advantages Disadvantages
F a c t o r 1 "Rewarding Work" "Reduced Autonomy and Responsibility"
F a c t o r 2 "External Stimuli and Support for Development" "Contract and Partner Issues"
F a c t o r 3 "Less Difficult Start-Up" "Fees"

TABLE 6
Behavioral Features of Franchisees

Factor Characteristics
F a c t o r 1 "Conformists"
F a c t o r 2 "Lookers-Around"
F a c t o r 3 "Opportunists"
F a c t o r 4 "Self-Confident and Self-Directed"

As far as the paradoxicalness is concerned, we interpret our dimensional findings hypothetically. Bearing in mind the exploratory nature of our study, we emphasize that these findings should be regarded as propositions rather than verified results. Further analyses of the data, longitudinal studies as well as qualitative approach are needed to draw stronger conclusions and to get a deeper understanding of this complex phenomenon:

1) "External stimuli and support for development" can be an advantage if a person tends to be a conformist, but a disadvantage if he or she is more autonomous and self-directed. 2) Entering into franchising is usually seen as "A less difficult way of setting up a business", but as soon as the initial franchisor support starts to lose some of its original value, the fees may gradually become a source of dissatisfaction and even a source conflict, and the franchisee may eventually want to look elsewhere for alternative opportunities. 3) For a franchisee, "Rewarding work" is a major advantage, but the valued rewards are much more intrinsic and profit related than growth or expansion related. 4) Even though "Opportunism" appears to be one of the behavioral dimensions, opportunistic variables are not very highly scored. This low-scoring may partly explain why these people originally preferred franchising to running an independent business operation.

Top of page | Chapter Listing | Return to 1997 Topical Index


© 1997 Babson College All Rights Reserved
Last Updated 06/01/98