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Enhancing the franchisees’ performance: A resource-based view
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
2012 (English)In: The Business & Management Review, ISSN 2047-2854 (Print); 2047-2862 (Online), Vol. 3, no 1, 220-232 p.Article in journal (Refereed) Published
Abstract [en]

Identifying the influential factors in business’ performance is an important cornerstone in business research. Although the study of franchise failure and success has received significant attention among researchers, the lack of knowledge about influential factors on franchisees’ performance as an integral part of the franchise system, as well as the consequences of franchising, has resulted in a gap in the franchise literature. According to previous literature, business success and failure results from the three major elements of resources, capacity and competency. Given the firm’s resources have a considerable share in explaining the variation of firms’ performance, the resource-based view provides an outstanding theoretical explanation for varying performance of the firms, and it looks to be promising for analyzing the franchisee’s performance. In franchising systems, provided services by the franchisor have a crucial role in franchisees’ performance. Therefore, this research was conducted to show how provided services by the franchisor, through impact on product and services’ quality, consistency, price and customer awareness, could enhance the franchisee’s performance.

Place, publisher, year, edition, pages
Harrow, London, UK: The Academy of Business & Retail Management , 2012. Vol. 3, no 1, 220-232 p.
Keyword [en]
Franchising, franchisees’ performance, resource-based view, food industry
National Category
Engineering and Technology Economics and Business
URN: urn:nbn:se:liu:diva-103320OAI: diva2:688369
International Trade & Academic Research Conference (ITARC), 7–8th November, 2012, London, UK
Available from: 2014-01-16 Created: 2014-01-16 Last updated: 2014-03-13Bibliographically approved
In thesis
1. Enhancing SMEs competitive advantage by franchising
Open this publication in new window or tab >>Enhancing SMEs competitive advantage by franchising
2014 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Although there is a large body of literature on franchising systems that are mainly produced from the franchisor's perspective, looking at franchising from the franchisee's point of view has remained largely uninvestigated. Creating and sustaining competitive advantage is the prerequisite for the franchisee's (as an SME) survival in today's competitive environment. This research's comprehensive literature review shows three major groups of factors influencing the franchisee’s competitive advantage, including the franchisor-related factors, the franchisee-related factors, and factors associated with the franchisor-franchisee relationship. Since the franchisor has a dominant role in the business, it can influence the franchisee in many ways. Therefore, it is crucial to put special emphasis on how the franchisor-related factors may influence the franchisee business success.

In light of the discussion above, this study was carried out to understand how franchisor-related factors, through enhancing/creating competitive advantage, might influence the franchisee’s business success. According to the literature on competitive advantage, three clusters of literature as three perspectives were reviewed and discussed. These include the resource-based view, the industry structure view, and the relational view. In the resource-based view, the firm's resources are considered as a source of competitive advantage, but in the relational view, not only the firm's internal resources, but also the interfirm resources are the source of competitive advantage. Therefore, this perspective has a significant contribution to this study. In addition to services provided services by the franchisor, as the resources, franchisor organizational factors specifically entrepreneurial orientation, and absorptive capacity were found relevant in the franchisee's competitive advantage. Accordingly, an integrative theoretical/analytical framework was built and used throughout the study.

Because of exploratory nature of the study, the qualitative method was chosen and applied. Along with the purpose of the study, a multiple-case study research strategy consisting of seven cases, in two franchising systems, was performed. The results of the analysis confirm that services provided by the franchisor, the franchisors’ entrepreneurial orientation, and the franchisees’ absorptive capacity have a significant role in enhancement of the franchisees’ competitive advantage. Other significant results of the franchisor-related factors enhancing competitive advantage were found to be: the speed of raw material supply, keeping consistency in quality, economy of scale and keeping prices competitive. Furthermore, the franchisor enhances the franchisee's competitive advantage by transferring business know-how and creating collective tacit knowledge, and as well improvement in the franchisee-specific human capital. Intellectual property in a franchise system through transferring the first mover advantage to the franchisee and creating the differentiated position affect the franchisee's competitive advantage. The franchisor’s entrepreneurial orientation creates the first-mover advantage for the franchisee. Similarly, the franchisor's absorptive capacity, through creating the first-mover advantage and improving the franchisee's social capital, enhances the franchisee's competitive advantage.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2014. 112 p.
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1637
National Category
Engineering and Technology
urn:nbn:se:liu:diva-103334 (URN)LiU-TEK-Lic 2013:71 (Local ID)978-91-7519-436-3 (print) (ISBN)LiU-TEK-Lic 2013:71 (Archive number)LiU-TEK-Lic 2013:71 (OAI)
2014-01-24, Sal A1, A-huset, Campus Valla, Linköpings universitet, Linköping, 10:15 (English)
Available from: 2014-01-17 Created: 2014-01-17 Last updated: 2014-01-17Bibliographically approved

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