The advantages that franchisees regarded 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". These findings are closely parallelled by those of the reviewed literature. For instance, the numerous studies conducted by John Stanworth and his various research associates seem to have arrived at somewhat similar conclusions.
Some disadvantages were also discovered: "Fees," "Excessive Working Hours" and "Contractual Issues" were clearly the most frequently cited disadvantages. These findings correlated with the suggestions of Falbe & Dandridge (1992, 48) who indicated that one of the most basic conflicts is failure of either the franchisor or franchisee to live up to the terms of the franchise agreement. Overall, Finnish franchisees´ mean scores were higher on the advantage perceptions than on the disadvantage perceptions. Also, standard deviations were higher in disadvantages.
The perceptions of advantages, disadvantages and characteristics had a dimensional structure. Three factors were delineated to portray the advantages (i.e. "Rewarding Work," "External Stimuli and Support for Development" and "Less Difficult Start-Up"), another three to portray disadvantages (i.e. "Reduced Autonomy," "Contract and Partner Issues" and "Fees") and four factors to describe franchisees´ entrepreneurial characteristics (i.e. "Conformists," "Self-Confident and Self-Directed," "Lookers-Around" and "Opportunists").
Not surprisingly, Finnish franchisees want to be successful and regard themselves as customer-oriented people who take responsibility for their own actions. Furthermore, they tend to be rather self-confident, but they are often neither confident nor willing enough to diversify or considerably expand their businesses. They seem to possess some of the typical entrepreneurial personality characteristics. Moreover, our results tend to support the suggestions of Anderson et al. (1992), namely that franchising may also offer an alternative avenue for entrepreneurship to individuals who otherwise are perhaps not so well-prepared for self-employment. Some of the past research supports this by indicating that franchisors prefer team players to franchisees who want to `own´ their businesses (Kursh 1986). Also, English & Hoy (1995) argued that franchisors do not want innovation and creativity, instead they favor replication and conformity.
The complexity of franchising can be best understood by investigating paradoxicalness. This may enable us to focus more sharply on both sides of the story. In fact, both paradoxes and reaction pairs were discovered in conceptual and empirical sections of the present study. Earlier literature demonstrates this very clearly (see Table 1). Typical examples include the "conflict thinking approach" by Falbe & Dandridge (1992, 48) and the findings of Dant et al. (1992) which showed that higher franchisee success was often related to a perception of both high autonomy and high dependence on the franchisor, varying across domains of activity.
Moreover, our empirical findings indicated that the world of franchisees included many ambiguous and contradictory features. Firstly, these were related to the highly dynamic and unique nature of a satisfactory franchisee-franchisor 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 often started to become, first a source of dissatisfaction, and later even a potential source of conflict. As time goes by franchisees may sometimes feel that they are no longer receiving adequate and relevant assistance and support from the franchisor to justify paying the old rates much less the new, often higher rates. Therefore, the support and assistance measures provided by the franchisor must be consistently updated and renewed. If this does not happen, fees, standardized concept and strict rules set down by franchisors may gradually become, first a source of dissatisfaction, and later even a potential source of conflict.
Secondly, the results implied that although defining the franchisor´s role as entrepreneur is generally accepted, entrepreneurial activities by franchisee may be viewed as a paradox. As the business environment becomes more and more competitive, the need for entrepreneurial activity by the franchisee tends to increase dramatically (Falbe et al., 1991, 13). On the other hand, the different franchisee perceptions of advantages and disadvantages were related to individuals and particularly to their personality characteristics and learning curves. The more entrepreneurial the franchisee was the more likely he or she was to conflict with the franchisor´s goals. Each franchisor-franchisee relationship appeared to be unique and highly dynamic in nature. In this context, the results were congruent with the earlier findings of Stanworth et al. (1995) who noticed that the motivational drives of franchisees tend to change as they become more experienced and particularly more successful.
Thirdly, a paradoxical aspect was discovered in the job contents. Franchisees felt that work was often internally rewarding, but at the same time in some areas constrained. Paradoxes were also present in the development of franchising concepts. On the one hand, the franchisees appreciated the support and stimuli provided by the franchise chain, but on the other hand they simultaneously faced some contractual and network-related obstacles. Finally, there might be a paradox in profitability. The franchisees gained satisfaction from a cheaper and easier start-up but they later tended to experience increased dissatisfaction with regular payments.
The implications can be grouped into three categories: franchising research, education and practice. Regarding research implications, we suggest that paradox approach and reaction pair thinking are useful tools to describe the dynamic and complex nature of franchising. In addition, more longitudinal franchising research is needed, especially in the areas of the learning curves of franchisees and the life cycles of franchising concepts. In fact, perhaps the focus of interest should be widened. Besides examining traits and personalities, we should look more carefully into the highly dynamic relationships between franchisors and franchisees.
Moreover, the different behavioral features among franchisees should be taken into account when training and education is provided. It appears that some franchisees are conformists in nature, while others are very self-confident and self-directed. Also, many of them manifest characteristics that are typical of "Growth-Seeking Opportunists", while some can be better termed as "Lookers-Around". These features are reflected in the way that the training and education provided by a franchisor are appreciated, especially in the early stages of the delicate franchisor-franchisee relationship. For instance, if training is given in a "stipulated" way, it may eventually become the source of dissatisfaction among the more entrepreneurial and/or experienced franchisees who often dislike strict control. In order to ensure a stimulating and rewarding relationship in practice, franchisors should not limit franchisee autonomy or responsibility too much. Because of the dynamic nature of franchising, contract issues do not seem to lose their importance after signing. Thus, the balance between rights and obligations should be continuously examined and related to the fees and support involved.
A cautious franchisor must surely pay attention to the above-mentioned issues in order to manage the paradoxicalness inherent in this complex relationship. For mutual benefit, the franchisor needs to promote a climate of trust and cooperation, including the constant renewal and updating of the support measures. Otherwise, the entrepreneurial drive and commitment shown by the franchisee might suffer as a result of the increasing frustration and dissatisfaction.
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Last Updated 03/04/98