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Rozenn Perrigot - One of the best experts on this subject based on the ideXlab platform.
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“Conflict-performance assumption” or “performance-conflict assumption”: Insights from Franchising
Journal of Retailing and Consumer Services, 2020Co-Authors: Rozenn Perrigot, Begona López-fernández, Guy BassetAbstract:Franchising is an organizational governance form where relational and formal contracts complement each other and where franchisor and franchisees together may obtain better performance than working alone. Although relational contracts may adapt to changing environments, they are not as efficient in ambiguous settings. In franchised stores, liability for low performance is not always clear. Indeed, franchisor and franchisees work in close collaboration, and, therefore, this ambiguity on causes of low performance may lead to conflicts. The Franchising literature, as far as we know, has addressed practitioners' concerns regarding performance on one side, and conflicts on the other side, but no study has exclusively focused on low performance and the emergence of conflicts. Our research contributes to the Franchising literature by filling this relative gap and, contrary to “conflict-performance assumption” (Pearson, 1973; Duarte and Davies, 2003) held in the broader context of distribution channels, we consider low performance to be a cause, rather than a consequence, of franchisor/franchisee conflicts. This empirical study deals with Franchising in France, the leading market in Franchising in Europe and the third largest in the world. We used a qualitative approach based on 44 in-depth interviews with 27 franchisors and executives/high-level managers of franchise chains, as well as 17 franchisees from various industries to get a dual, and so more complete, assessment of Franchising practitioners' views of performance-related conflicts. Our research findings show that franchisees, as independent small business owners, give priority to financial results compared to other goals and they are driven to continuously improve the performance of their store(s). When expectations are not met, franchisees sometimes blame franchisors because they are interdependent in their success and liability is not straightforward. As a collaborative team, franchisors and franchisees may benefit from minimizing conflicts and preventing them with the careful selection and management of franchisees that share franchisor's values and have internal locus of control.
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Good faith in Franchising: The perceptions of franchisees, franchisors and their lawyers in the French context
International Journal of Retail & Distribution Management, 2019Co-Authors: Rozenn Perrigot, Andrew Terry, Cary Di LerniaAbstract:The relational nature of Franchising flowing from the contract between franchisor and franchisee which enshrines a close, continuing relationship raises the issue of good faith. While there are academic papers analyzing good faith, these do not capture the practical understanding and expression of the concept and the manner and application in which it operates in the real world of Franchising. The purpose of this paper is to assess how good faith is defined and understood by franchise practitioners – franchisees, franchisors and their legal advisors.,The authors have adopted a qualitative approach by conducting and analyzing a series of 18 in-depth interviews with franchisees, franchisors and lawyers specializing in Franchising.,The findings show that good faith is particularly important in Franchising because of the disparity in the knowledge and power of the parties. They suggest that good faith is not only a legal notion but also a notion that is linked to the personal relationship between the franchisor and its franchisees. It then plays an important role in terms of management of this relationship and of the system as a whole. Moreover, they demonstrate that there is not one single shared understanding of good faith amongst Franchising practitioners. Indeed, franchisees, franchisors and specialist franchise lawyers suggested that good faith can refer to transparency, trust, loyalty, fairness and equity amongst the franchisees, fair play, frankness, respect, ethics, kindness, “best efforts” and personalities.,The originality of the research lies in the fact that good faith is examined through the voice of Franchising practitioners who explain how they define and understand good faith rather than through a detached academic lens.
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Good faith in Franchising: The perceptions of franchisees, franchisors and their lawyers in the French context
International Journal of Retail and Distribution Management, 2019Co-Authors: Rozenn Perrigot, Andrew Terry, Cary Di LerniaAbstract:PurposeThe relational nature of Franchising flowing from the contract between franchisor and franchisee which enshrines a close, continuing relationship raises the issue of good faith. While there are academic papers analyzing good faith, these do not capture the practical understanding and expression of the concept and the manner and application in which it operates in the real world of Franchising. The purpose of this paper is to assess how good faith is defined and understood by franchise practitioners – franchisees, franchisors and their legal advisors.Design/methodology/approachThe authors have adopted a qualitative approach by conducting and analyzing a series of 18 in-depth interviews with franchisees, franchisors and lawyers specializing in FranchisingFindingsThe findings show that good faith is particularly important in Franchising because of the disparity in the knowledge and power of the parties. They suggest that good faith is not only a legal notion but also a notion that is linked to the personal relationship between the franchisor and its franchisees. It then plays an important role in terms of management of this relationship and of the system as a whole. Moreover, they demonstrate that there is not one single shared understanding of good faith amongst Franchising practitioners. Indeed, franchisees, franchisors and specialist franchise lawyers suggested that good faith can refer to transparency, trust, loyalty, fairness and equity amongst the franchisees, fair play, frankness, respect, ethics, kindness, “best efforts” and personalities.Originality/valueThe originality of the research lies in the fact that good faith is examined through the voice of Franchising practitioners who explain how they define and understand good faith rather than through a detached academic lens
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Franchising in the healthcare sector: The case of Child and Family Wellness clinics in Kenya
Journal of Retailing and Consumer Services, 2018Co-Authors: Rozenn PerrigotAbstract:Franchising has been growing in most countries and most industries, and it is now growing in social sectors, e.g., healthcare, education, the provision of water. The aim of this paper is to understand and assess, using the case study of Child and Family Wellness clinics (CFW), the business model used by franchisors in the social sector; i.e., how franchisors use the core elements of Franchising to manage their networks in the social sector. This research deals with three main elements of Franchising, i.e., know-how, assistance and brand name, as well as the franchisor/franchisee and franchisee/franchisee relationships. The empirical work, based on the Child and Family Wellness clinics (CFW) network in Kenya, relies on primary data gathered through the conduction and analysis of 19 in-depth interviews and on secondary data from access to internal data. The main findings of this research show that Franchising in the social sector seems to work no differently from Franchising in more traditional sectors, at least in terms of know-how, assistance, brand name and franchisor/franchisee and franchisee/franchisee relationships. This research serves as an example and a set of guidelines for entrepreneurs who want to develop a franchise concept in the healthcare sector or any other social sectors, as well as a support for these entrepreneurs to develop and grow their concept. It can provide them with ideas on what should be implemented in the areas of know-how, assistance, brand name and relationships in order to succeed, e.g., organization of training sessions, setting up of committees.
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An exploration of Franchising in Africa
2017Co-Authors: Rozenn PerrigotAbstract:With promising projected growth in terms of economic indicators and population, African countries have become attractive to both non-African and African franchisors. This chapter’s objective is to initiate research on Franchising in Africa by looking at concrete examples of international and African franchise businesses in various African countries with a special focus on South Africa and Egypt. This chapter adds to the literature on Franchising in emerging countries and, more specifically, to the limited stream dealing with Franchising in Africa. It also contributes to the practice by providing an overview of the franchise business in South Africa and Egypt and by highlighting the opportunities and challenges for both international and African franchisors.
Chris Nash - One of the best experts on this subject based on the ideXlab platform.
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exploring the effects of passenger rail Franchising in britain evidence from the first two rounds of Franchising 1997 2008
Research in Transportation Economics, 2010Co-Authors: Andrew Smith, Phill Wheat, Chris NashAbstract:Abstract This paper provides an up-to-date review of the previous literature concerning the impact of passenger rail Franchising on productivity and costs in Britain, and also presents important new evidence. In particular, the extension in time of previously-used datasets offers the first opportunity to study the impacts of re-Franchising. The previous literature emphasised the failure of Franchising to produce sustained productivity gains, with a sharp deterioration in productivity after 2000. The new evidence presented offers a somewhat more positive view of the British experience. It suggests that part of what was previously considered to be falling productivity may in fact be due to exogenous changes in diesel prices. Further, new data suggests that the recent increases in costs have resulted in higher quality of service. Finally, competitive re-Franchising, and the associated unwinding of short-term management and re-negotiated contracts, seems to have led to improvements in productivity between 2006 and 2008. Nevertheless, it remains the case that passenger rail Franchising in Britain has failed to reduce costs in the way experienced in many other industries and in rail in other European countries. The evidence is that somewhat larger franchises, avoiding overlapping and optimising train density and length, should reduce costs. We also speculate that the major increase in wages and conditions of staff might be moderated by longer franchises, although that remains to be proved. This re-appraisal of the British case is important in the context of the wider international interest in the use of Franchising in passenger rail, and its relevance to the current review of ways of introducing competition into the domestic rail passenger market in Europe.
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passenger rail Franchising in britain has it been a success
Rivista Internazionale de Economia dei Trasporti, 2009Co-Authors: Andrew Smith, Chris Nash, Phill WheatAbstract:Franchising has been recognized, for many years, as a way to introduce competition to areas of the economy via competitive tendering where direct market competition is either undesirable or impossible. A number of European nations have used Franchising as a means to secure all or some subsidized service provision. Great Britain, however, has made Franchising a means to secure (virtually) all rail passenger service provision. Drawing conclusions about British passenger rail Franchising in recent years is not easy. Several points, however, do stand out. First, competition for British franchises has been invariably high, with a shortlist of four or five bidders out of a wider field. Second, there has been extremely healthy traffic and revenue growth, in spite of the temporary setback that happened after service quality collapsed at Hatfield. Third, train operating company (TOC) costs do not seem to have been driven down by Franchising. Fourth, when franchisees have not been able to achieve their projected financial performance, there have been substantial problems in dealing with them. Also, that TOCs with renegotiated contracts saw higher cost growth than those without is suggested by the evidence. Overall, the authors conclude that British passenger rail Franchising has failed to achieve its cost-side objectives, but may be regarded as a moderate demand-side
Rajiv P Dant - One of the best experts on this subject based on the ideXlab platform.
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international Franchising research some thoughts on the what where when and how
Journal of Marketing Channels, 2014Co-Authors: Rajiv P Dant, Marko GrunhagenAbstract:The purpose of this article is to examine the present state of international Franchising research. We consider the origins and evolution of Franchising as an enterprise form and summarize relevant research in this area. We advance and substantiate the premise that Franchising research in the global arena has largely followed the geographic expansion trajectory of the franchise industry. And, based on these themes, we conclude by identifying a series of significant research topics in the international Franchising domain.
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Franchising research frontiers for the twenty first century
Journal of Retailing, 2011Co-Authors: Rajiv P Dant, Marko Grunhagen, Josef WindspergerAbstract:About four decades ago, during the formative years of the Franchising industry, visionary authors like Oxenfeldt and Kelly (1968) and Ozanne and Hunt (1971) proposed a rich slate of research agenda which still continues to guide some of the contemporary scholarship in the Franchising domain. This article (1) explicates some of the unique features of the Franchising context that presumably inspired these pioneering authors, (2) discusses four established elements of ontology unique to Franchising and isolates the remaining research gaps therein, (3) specifies a new slate of more contemporary research agenda for future scholarship, and (4) concludes with a brief discussion of the ten articles featured in this Special Issue of the Journal of Retailing dedicated to the theme of Franchising and Retailing.
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a futuristic research agenda for the field of Franchising
Journal of Small Business Management, 2008Co-Authors: Rajiv P DantAbstract:This brief paper summarizes the sweeping changes taking place within the North American Franchising reality and extols Franchising researchers to venture forth into novel arenas of investigation. In the process, it also offers commentary on two articles appearing in this issue of the Journal of Small Business Management. In general, this polemic invites researchers (1) to look beyond the North American contexts for data and original theoretical development; (2) to investigate new phenomena associated with Franchising; and (3) to examine extant ontology of Franchising research topics from novel perspectives. Illustrative frameworks for executing this research agenda are presented throughout. Some Key Research Gaps Franchising, an archetypal American invention, offers an especially dramatic illustration of entrepreneurial activity with an exclusive set of benefits accruing to the franchisee-entrepreneurs that collaborate with their franchisor-entrepreneur partners to create economic value together (Dant, Perrigot, and Cliquet 2006). And even though Franchising is also the world's fastest growing form of retailing (Dant, Kacker, Coughlan, and Emerson 2007), most of the Franchising research and the resultant theory development has been focused on single-country investigations, primarily based in the United States This fixation is understandable. Not only was modern Franchising born in the United States, Franchising is a big component of the U.S. economy. Based on the data taken from the World Franchise Council, over 1,500 Franchising chains, representing more than 760,000 franchisees and almost 18 million employees currently operate in the United States. One in seven jobs in the U.S. labor force represents a franchise-related job, which tantamount to over $506 billion of the U.S. private sector payroll, generating a total economic output in excess of $1.53 trillion or roughly 10 percent of the U.S. private-sector economy (Dant, Perrigot, and Cliquet 2006; Reynolds 2004). In addition, in apparent homage to the most ostensive face of Franchising, a large number of these empirical investigations have been based on the fast-food industry data (that is, the McDonald's effect!) Moreover, perhaps taking their cue from the U.S. courts that have upheld the premise that the legitimate owners of franchise businesses are the franchisors rather than franchisees, much of what we know about Franchising is based on investigations of the franchisors to the virtual exclusion of research focused on the franchisee perspective (however, for notable exceptions, see Grunhagen and Mittelstaedt [2005]; Dickey [2003]; Grunhagen and Dorsch [2003]; Weaven and Frazer [2003]). Consequently, questions constantly arise about the cross-cultural or emic generalizability of our eticoriented Franchising theories (Niblo and Jackson 2004; Berry 1969), the cross-industry applicability of the received knowledge about Franchising theory and practice, and the applicability of franchisor-based research findings to the mindset of franchisees. It is indeed important for Franchising scholars to ask basic questions like (1) do the tenets of agency theory (Jensen and Meckling 1976) or the resource constraints theory (Oxenfeldt and Kelly 1968; Pfeffer and Salancik 1978) apply cross-culturally to countries like Iraq, Israel, Russia, China, or India; (2) can we comfortably generalize our knowledge of Franchising based on the North American fast-food industry to other Franchising sectors like construction, banking, or manufacturing; or (3) do the franchisees really see eye-to-eye with the franchisors regarding the benefits of Franchising or their definition of franchise failure? The realistic general current answer to many of these questions is We just don't know! (I applaud the effort of Cochet, Dormann, and Ehrmann [2007] for including multiple industry sectors in their investigation, attempting an emic extension of the relational exchange theory [Kaufmann and Dant 1992; Macneil 1980] to a German setting, and together with Michael and Combs [2007], focusing their surveys on the franchisee viewpoint rather than on the franchisor perspective. …
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Franchising and the domain of entrepreneurship research
Journal of Business Venturing, 1999Co-Authors: Patrick J Kaufmann, Rajiv P DantAbstract:Abstract In this essay, we explore the relationship between Franchising and entrepreneurship in general, and their research domains in particular. We begin by categorizing the focus of various representative definitions of entrepreneurship as: (1) traits, (2) processes, or (3) activities, and adopt the view that identifying the unique research domain of entrepreneurship is a more worthwhile endeavor than attempting to reach definitional consensus. We subsequently discuss the differences between entrepreneurship in the manufacturing and retailing contexts, and the particular features of Franchising as it relates to the study of retailing entrepreneurship. Specifically, four areas are examined: the franchisor’s role in creating an innovative concept, the franchisee’s role in bringing the franchisor’s concept to new markets, the franchisee’s acceptance of risk, and the special issues surrounding the pervasive practice of multi-unit Franchising. We conclude with a brief discussion of the reasons for including the study of Franchising, franchisors, and franchisees as integral areas within the distinctive domain of entrepreneurship research, and similarly exhort Franchising researchers to explore the implications of their work for the study of entrepreneurship.
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multi unit Franchising growth and management issues
Journal of Business Venturing, 1996Co-Authors: Patrick J Kaufmann, Rajiv P DantAbstract:Abstract Entrepreneurs in a number of retailing sectors have eschewed the creation of company-owned chains and have embraced Franchising as a preferred method for growing their businesses. There have been two leading reasons proposed for this preference. First, that franchisees provide the financial capital necessary for expansion, and second that franchisees manage the outlets better than company employees would if the unit were company owned. Interestingly, although many entrepreneur/franchisors confirm the relevance of the capital acquisition argument in their decision-making, theoretical analysis has discounted its importance. Instead, researchers have focused on the incentives of employee store-managers to misrepresent their ability and their effort as the dominant impetus behind Franchising. Misrepresentation by employees as to ability and effort imposes costs and inefficiencies on the entrepreneur's chain. Arguing that Franchising solves these problems by having the stores managed by persons with claims to the profits, these researchers have, by and large, rejected the capital acquisition argument for Franchising in favor of this incentive-based rationale. Within this view, multi-unit Franchising presents a curious anomaly. Multi-unit Franchising, either through the incremental expansion by the franchisee one unit at a time or through the rights to open multiple units contained in an area development agreement, creates a collection of mini-chains within the franchise system. These mini-chains are operated by employee store-managers. Of course, they are employees of the franchisee, but they are employees nonetheless, and as franchise researchers have traditionally argued regarding the entrepreneur's employees, they will have incentives to misrepresent their ability and effort. Moreover, multi-unit Franchising is ubiquitous. If multi-unit Franchising is at odds with the incentive rationale for Franchising, and it has a positive association with the growth of franchise systems, it must be providing the entrepreneur with some other benefit. In this study, we argue that the benefit it provides is access to capital. Through a study of fast-food franchise systems, we demonstrate that the more a chain engages in multi-unit Franchising (i.e., the greater the proportion of multi-unit franchisees it has), the faster it grows, even faster than franchise systems generally. Moreover, we show that the level of commitment franchisors feel toward continuing to franchise is negatively related to the average number of units per franchisee and negatively related to their ability to obtain financial capital elsewhere. In other words, although multi-unit Franchising helps an entrepreneur grow his or her business by providing increased access to capital, store level incentive problems get increasingly troublesome as franchisees get more and more units. It would appear, therefore, that capital acquisition is a relevant reason for engaging in Franchising after all.
Andrew Smith - One of the best experts on this subject based on the ideXlab platform.
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exploring the effects of passenger rail Franchising in britain evidence from the first two rounds of Franchising 1997 2008
Research in Transportation Economics, 2010Co-Authors: Andrew Smith, Phill Wheat, Chris NashAbstract:Abstract This paper provides an up-to-date review of the previous literature concerning the impact of passenger rail Franchising on productivity and costs in Britain, and also presents important new evidence. In particular, the extension in time of previously-used datasets offers the first opportunity to study the impacts of re-Franchising. The previous literature emphasised the failure of Franchising to produce sustained productivity gains, with a sharp deterioration in productivity after 2000. The new evidence presented offers a somewhat more positive view of the British experience. It suggests that part of what was previously considered to be falling productivity may in fact be due to exogenous changes in diesel prices. Further, new data suggests that the recent increases in costs have resulted in higher quality of service. Finally, competitive re-Franchising, and the associated unwinding of short-term management and re-negotiated contracts, seems to have led to improvements in productivity between 2006 and 2008. Nevertheless, it remains the case that passenger rail Franchising in Britain has failed to reduce costs in the way experienced in many other industries and in rail in other European countries. The evidence is that somewhat larger franchises, avoiding overlapping and optimising train density and length, should reduce costs. We also speculate that the major increase in wages and conditions of staff might be moderated by longer franchises, although that remains to be proved. This re-appraisal of the British case is important in the context of the wider international interest in the use of Franchising in passenger rail, and its relevance to the current review of ways of introducing competition into the domestic rail passenger market in Europe.
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passenger rail Franchising in britain has it been a success
Rivista Internazionale de Economia dei Trasporti, 2009Co-Authors: Andrew Smith, Chris Nash, Phill WheatAbstract:Franchising has been recognized, for many years, as a way to introduce competition to areas of the economy via competitive tendering where direct market competition is either undesirable or impossible. A number of European nations have used Franchising as a means to secure all or some subsidized service provision. Great Britain, however, has made Franchising a means to secure (virtually) all rail passenger service provision. Drawing conclusions about British passenger rail Franchising in recent years is not easy. Several points, however, do stand out. First, competition for British franchises has been invariably high, with a shortlist of four or five bidders out of a wider field. Second, there has been extremely healthy traffic and revenue growth, in spite of the temporary setback that happened after service quality collapsed at Hatfield. Third, train operating company (TOC) costs do not seem to have been driven down by Franchising. Fourth, when franchisees have not been able to achieve their projected financial performance, there have been substantial problems in dealing with them. Also, that TOCs with renegotiated contracts saw higher cost growth than those without is suggested by the evidence. Overall, the authors conclude that British passenger rail Franchising has failed to achieve its cost-side objectives, but may be regarded as a moderate demand-side
Phill Wheat - One of the best experts on this subject based on the ideXlab platform.
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exploring the effects of passenger rail Franchising in britain evidence from the first two rounds of Franchising 1997 2008
Research in Transportation Economics, 2010Co-Authors: Andrew Smith, Phill Wheat, Chris NashAbstract:Abstract This paper provides an up-to-date review of the previous literature concerning the impact of passenger rail Franchising on productivity and costs in Britain, and also presents important new evidence. In particular, the extension in time of previously-used datasets offers the first opportunity to study the impacts of re-Franchising. The previous literature emphasised the failure of Franchising to produce sustained productivity gains, with a sharp deterioration in productivity after 2000. The new evidence presented offers a somewhat more positive view of the British experience. It suggests that part of what was previously considered to be falling productivity may in fact be due to exogenous changes in diesel prices. Further, new data suggests that the recent increases in costs have resulted in higher quality of service. Finally, competitive re-Franchising, and the associated unwinding of short-term management and re-negotiated contracts, seems to have led to improvements in productivity between 2006 and 2008. Nevertheless, it remains the case that passenger rail Franchising in Britain has failed to reduce costs in the way experienced in many other industries and in rail in other European countries. The evidence is that somewhat larger franchises, avoiding overlapping and optimising train density and length, should reduce costs. We also speculate that the major increase in wages and conditions of staff might be moderated by longer franchises, although that remains to be proved. This re-appraisal of the British case is important in the context of the wider international interest in the use of Franchising in passenger rail, and its relevance to the current review of ways of introducing competition into the domestic rail passenger market in Europe.
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passenger rail Franchising in britain has it been a success
Rivista Internazionale de Economia dei Trasporti, 2009Co-Authors: Andrew Smith, Chris Nash, Phill WheatAbstract:Franchising has been recognized, for many years, as a way to introduce competition to areas of the economy via competitive tendering where direct market competition is either undesirable or impossible. A number of European nations have used Franchising as a means to secure all or some subsidized service provision. Great Britain, however, has made Franchising a means to secure (virtually) all rail passenger service provision. Drawing conclusions about British passenger rail Franchising in recent years is not easy. Several points, however, do stand out. First, competition for British franchises has been invariably high, with a shortlist of four or five bidders out of a wider field. Second, there has been extremely healthy traffic and revenue growth, in spite of the temporary setback that happened after service quality collapsed at Hatfield. Third, train operating company (TOC) costs do not seem to have been driven down by Franchising. Fourth, when franchisees have not been able to achieve their projected financial performance, there have been substantial problems in dealing with them. Also, that TOCs with renegotiated contracts saw higher cost growth than those without is suggested by the evidence. Overall, the authors conclude that British passenger rail Franchising has failed to achieve its cost-side objectives, but may be regarded as a moderate demand-side
