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  • 1.
    Asgharian Bourkheili, Ehsan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Enhancing SMEs competitive advantage by franchising2014Licentiate 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.

    List of papers
    1. Enhancing the franchisees’ performance: A resource-based view
    Open this publication in new window or tab >>Enhancing the franchisees’ performance: A resource-based view
    2012 (English)In: The Business & Management Review, ISSN 2047-2854, Vol. 3, no 1, p. 220-232Article 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
    Keywords
    Franchising, franchisees’ performance, resource-based view, food industry
    National Category
    Engineering and Technology Economics and Business
    Identifiers
    urn:nbn:se:liu:diva-103320 (URN)
    Conference
    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
    2. Franchisees’ Activities as Entrepreneurship
    Open this publication in new window or tab >>Franchisees’ Activities as Entrepreneurship
    2013 (English)Conference paper, Published paper (Other academic)
    Abstract [en]

    During the last decades, franchising has turned into one of the fastest-growing business forms. Research in franchising has been viewed through the four major perspectives of economics, strategy, marketing and entrepreneurship. Although there is a consensus that the franchisors’ activities are considered as entrepreneurship, this notion is disputed with regard to franchisees. A paradox in entrepreneurial activities of the franchisee has caused doubt in considering franchisees’ activities as entrepreneurship. On the one hand, in a franchisee context, some believe opportunity is always identified and that the franchisor helps the franchisees in exploitation. On the other hand, the opposing view considers a franchisee as an entrepreneur who focuses on opportunity, risk and innovation. Ignoring the franchisees’ capabilities and abilities in innovation and introducing new products can prevent a franchise system from taking advantage of environmental change. Therefore, due to the importance of identification of unique aspects of entrepreneurship research rather than unique definition of entrepreneurship, and attention to entrepreneurial process as a core unit of analysis, this research will examine whether franchisees’ activities can be considered as entrepreneurship. According to the Shane model, the entrepreneurial process involves the existence of profitbased (objective) opportunities, risk-taking and some kind of innovation. Nature of opportunity in franchised outlets is closer to Kirznerian's view than Schumpeterian's  view. Sources of opportunities in franchised outlets are not so clear, like the introduction of a new restaurant in a storefront where none had existed before. In Schumpeter's view, according to different types of innovation, franchisees’ operations involve product-market  innovativeness to include market research, product design, and innovations in advertising and promotion. Regarding risk-taking as the third dimension of the entrepreneurial process, franchisees risk their capital. Although it seems in franchise systems that risk for the  franchisee is, to some extent, shared with the franchisor, no franchisor will be able to eliminate the financial, business and personal risk of the franchisees. The franchisor also transfers the risk of expanding into new markets to the franchisees. In sum, franchisees do almost all of the functions of other entrepreneurs, except generating new ideas in the initial step of running a business.

    Keywords
    Franchisee, entrepreneurship, innovation, entrepreneurial opportunities, risk-taking
    National Category
    Engineering and Technology Economics and Business
    Identifiers
    urn:nbn:se:liu:diva-103321 (URN)
    Conference
    WEI International Academic Conference Proceedings, 94-104, January 14-16, 2013 , Antalya, Turkey
    Available from: 2014-01-16 Created: 2014-01-16 Last updated: 2014-01-17Bibliographically approved
    3. Entrepreneurial process in franchised outlets
    Open this publication in new window or tab >>Entrepreneurial process in franchised outlets
    2013 (English)In: Journal of WEI Business and Economics, E-ISSN 2166-7918, Vol. 2, no 1, p. 59-71Article in journal (Other academic) Published
    Abstract [en]

    Although in recent years the study of franchise systems has been the subject of many academic studies, most of them have studied franchise systems from the franchisor's point of view, and the franchisee point of view has received only limited attention. Researchers in business fields have adopted four main perspectives in the study of franchising: strategy, economics, marketing, and entrepreneurship. From an entrepreneurship perspective, while there is no doubt about considering a franchisor's business as an entrepreneurial firm, considering the franchisee's activities during the running and managing of an outlet as an entrepreneurial firm is disputed. An entrepreneurial firm includes involvement in product innovation, commitment to calculated risk, proactiveness and aggressiveness. While the diversity of definitions about entrepreneurship has caused a problem to understand what an entrepreneurial firm is, a process-focused approach offers much unexplored potential for understanding the nature of entrepreneurship in entrepreneurial firms. Therefore, due to the pivotal role of an entrepreneurial process in the nature of entrepreneurship, and considering the entrepreneurial process as the core unit of analysis in entrepreneurial firms, this article aims to study what happens during the entrepreneurial process in a franchised outlet. This study shows, although franchisees are restricted about product innovation, and franchisor reduces the risk of business for them, the franchisor never can omit the risk for franchisee. Moreover, many product innovations in the franchise system stem from the franchisee's ideas, and the franchisor will never be able to eliminate the risk for the franchisees. The franchisee's business also encompasses all dimensions of the entrepreneurial process as the unique features of entrepreneurial firms.

    Keywords
    Franchising, entrepreneurial firm, entrepreneurial opportunity, entrepreneurial process, risk-taking
    National Category
    Engineering and Technology Economics and Business
    Identifiers
    urn:nbn:se:liu:diva-103322 (URN)
    Available from: 2014-01-16 Created: 2014-01-16 Last updated: 2017-04-11Bibliographically approved
    4. Entrepreneurial orientation in franchising systems: A franchisee perspective
    Open this publication in new window or tab >>Entrepreneurial orientation in franchising systems: A franchisee perspective
    2013 (English)Conference paper, Published paper (Other academic)
    Abstract [en]

    Despite the importance of entrepreneurial activities and the role of franchisees in the generation of new ideas and innovations in the franchise system, there are limited studies on the conduct of the entrepreneurial orientation (EO) within the context of franchising and from the franchisee perspective. Although in a franchise system, the franchisor always tries to develop the standardization across the system to take advantage of cost minimization, different local environments require some flexibilities and adaptation in a franchisor policy (Falbe et al., 1999). Therefore, the franchisor should balance between standardization and adaptation, and display the entrepreneurial behaviors to take advantage of local market opportunities (Bradach, 1997). Given the important role of franchising in global wealth creation, understanding the extent to which an EO is desirable in franchise systems is an area which merits attention (Dada and Watson, 2012). Therefore, this study examines the entrepreneurial orientation in the franchised outlets. Findings from this study show that innovativeness in a franchise system is different in the core and peripheral elements of a product or service. The franchisor in a franchise system restricts the franchisees for innovation in "peripheral" elements of products. In addition, the franchisor concentrates on the innovation in the "core" elements. Both the franchisor and franchisee equally share the risk in a franchise system, and the franchisee takes even more risk in entering the new market and bearing the financial risk. The franchisee's autonomy in a franchise system is limited to the decision making about the peripheral elements. The franchisor almost always thinks about the future and seeks new opportunity in the industry; in fact, the franchisor in a system proactively looks for new opportunities. In contrast, the franchisees in a franchise system aggressively react to local competitors and apply the proper strategy to overcome them.

    Keywords
    Franchising, entrepreneurial orientation, innovativeness, proactiveness, competitive aggressiveness
    National Category
    Engineering and Technology Economics and Business
    Identifiers
    urn:nbn:se:liu:diva-103323 (URN)
    Conference
    The European Entrepreneurship: How Entrepreneurs (Should) Act in Global Business Environment, Fifth Anniversary International Conference , 9 -11 September 2013, Albena, Varna, Bulgaria
    Available from: 2014-01-16 Created: 2014-01-16 Last updated: 2014-01-17Bibliographically approved
  • 2.
    Asgharian Bourkheili, Ehsan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, Faculty of Science & Engineering.
    Performance in Franchise Systems: The Franchisee Perspective2015Doctoral thesis, monograph (Other academic)
    Abstract [en]

    During the last decades, franchising as an organizational form has received a lot of attention from researchers and practitioners alike. While many studies have examined various aspects of franchising from the franchisor's perspective, little research has taken the franchisee’s perspective. Therefore, given the importance of franchisees in a franchise system, the lack of research about consequences from the franchisee's perspective, and that many of the previous studies have taken a top-bottom view, this research concentrated on the franchisee's performance. This study focused on business format franchising in the restaurant industry in two countries, Iran and Sweden.

    In this study, the three perspectives of entrepreneurship, strategic management, and marketing were used to study the franchisee’s performance. Moreover, the resourcebased view, relational view, and relational exchange theory have been used to find the influential factors in a franchisee’s performance. Therefore, by considering franchising as a mutual relationship and examining the influential factors in a franchisee's performance, the related factors of both the franchisor and franchisee, as well as the relationship between them, were examined.

    According to the franchisee’s related factors, the franchisor's related factors, and the relationship and environmental factors, 12 main hypotheses and 9 sub-hypotheses were developed. In total, 191 usable questionnaires from Sweden and Iran, comprising a response rate of 22 percent, were returned from the franchisees. In this study, confirmatory factor analysis was used to test the construct measurement; to test the hypothesis, hierarchical multiple regression analysis was performed. Moreover, the Chow test was conducted to integrate the data from these two countries.

    A primary contribution of this study is taking a bottom-top view in franchising research. This study also provided a detailed and holistic view about the consequences of franchising for franchisees. Moreover, this study, offers important contributions toward understanding entrepreneurial activities, as a controversial issue, in franchising outlets.

    The results provide interesting insights into the franchisee’s performance. While the franchisees’ related factors of absorptive capacity, Kirznerian entrepreneurial orientation, and social capital positively affected their performance, Schumpeterian entrepreneurial orientation and human capital did not affect their performance. Moreover, the franchisor’s related factors of system profitability, brand reputation, advertisement and providing raw material had a positive influence on the performance. However, training did not cause a difference in the franchisee’s performance. All relationship factors also positively affected the performance, and conflict and satisfaction mediated the relationship between trust and performance. Finally, the implications of this study and suggestions for further contributions in this stream of research are discussed.

  • 3.
    Asgharian, Ehsan
    et al.
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Dadfar, Hossein
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Brege, Steffan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Enhancing the franchisees’ performance: A resource-based view2012In: The Business & Management Review, ISSN 2047-2854, Vol. 3, no 1, p. 220-232Article in journal (Refereed)
    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.

  • 4.
    Asgharian, Ehsan
    et al.
    Linköping University, Department of Management and Engineering. Linköping University, The Institute of Technology.
    Dadfar, Hossein
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Brege, Steffan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Entrepreneurial orientation in franchising systems: A franchisee perspective2013Conference paper (Other academic)
    Abstract [en]

    Despite the importance of entrepreneurial activities and the role of franchisees in the generation of new ideas and innovations in the franchise system, there are limited studies on the conduct of the entrepreneurial orientation (EO) within the context of franchising and from the franchisee perspective. Although in a franchise system, the franchisor always tries to develop the standardization across the system to take advantage of cost minimization, different local environments require some flexibilities and adaptation in a franchisor policy (Falbe et al., 1999). Therefore, the franchisor should balance between standardization and adaptation, and display the entrepreneurial behaviors to take advantage of local market opportunities (Bradach, 1997). Given the important role of franchising in global wealth creation, understanding the extent to which an EO is desirable in franchise systems is an area which merits attention (Dada and Watson, 2012). Therefore, this study examines the entrepreneurial orientation in the franchised outlets. Findings from this study show that innovativeness in a franchise system is different in the core and peripheral elements of a product or service. The franchisor in a franchise system restricts the franchisees for innovation in "peripheral" elements of products. In addition, the franchisor concentrates on the innovation in the "core" elements. Both the franchisor and franchisee equally share the risk in a franchise system, and the franchisee takes even more risk in entering the new market and bearing the financial risk. The franchisee's autonomy in a franchise system is limited to the decision making about the peripheral elements. The franchisor almost always thinks about the future and seeks new opportunity in the industry; in fact, the franchisor in a system proactively looks for new opportunities. In contrast, the franchisees in a franchise system aggressively react to local competitors and apply the proper strategy to overcome them.

  • 5.
    Asgharian, Ehsan
    et al.
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Dadfar, Hossein
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Brege, Steffan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Entrepreneurial process in franchised outlets2013In: Journal of WEI Business and Economics, E-ISSN 2166-7918, Vol. 2, no 1, p. 59-71Article in journal (Other academic)
    Abstract [en]

    Although in recent years the study of franchise systems has been the subject of many academic studies, most of them have studied franchise systems from the franchisor's point of view, and the franchisee point of view has received only limited attention. Researchers in business fields have adopted four main perspectives in the study of franchising: strategy, economics, marketing, and entrepreneurship. From an entrepreneurship perspective, while there is no doubt about considering a franchisor's business as an entrepreneurial firm, considering the franchisee's activities during the running and managing of an outlet as an entrepreneurial firm is disputed. An entrepreneurial firm includes involvement in product innovation, commitment to calculated risk, proactiveness and aggressiveness. While the diversity of definitions about entrepreneurship has caused a problem to understand what an entrepreneurial firm is, a process-focused approach offers much unexplored potential for understanding the nature of entrepreneurship in entrepreneurial firms. Therefore, due to the pivotal role of an entrepreneurial process in the nature of entrepreneurship, and considering the entrepreneurial process as the core unit of analysis in entrepreneurial firms, this article aims to study what happens during the entrepreneurial process in a franchised outlet. This study shows, although franchisees are restricted about product innovation, and franchisor reduces the risk of business for them, the franchisor never can omit the risk for franchisee. Moreover, many product innovations in the franchise system stem from the franchisee's ideas, and the franchisor will never be able to eliminate the risk for the franchisees. The franchisee's business also encompasses all dimensions of the entrepreneurial process as the unique features of entrepreneurial firms.

  • 6.
    Asgharian, Ehsan
    et al.
    Linköping University, Department of Management and Engineering. Linköping University, The Institute of Technology.
    Dadfar, Hossein
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Brege, Steffan
    Linköping University, Department of Management and Engineering, Industrial Economics. Linköping University, The Institute of Technology.
    Franchisees’ Activities as Entrepreneurship2013Conference paper (Other academic)
    Abstract [en]

    During the last decades, franchising has turned into one of the fastest-growing business forms. Research in franchising has been viewed through the four major perspectives of economics, strategy, marketing and entrepreneurship. Although there is a consensus that the franchisors’ activities are considered as entrepreneurship, this notion is disputed with regard to franchisees. A paradox in entrepreneurial activities of the franchisee has caused doubt in considering franchisees’ activities as entrepreneurship. On the one hand, in a franchisee context, some believe opportunity is always identified and that the franchisor helps the franchisees in exploitation. On the other hand, the opposing view considers a franchisee as an entrepreneur who focuses on opportunity, risk and innovation. Ignoring the franchisees’ capabilities and abilities in innovation and introducing new products can prevent a franchise system from taking advantage of environmental change. Therefore, due to the importance of identification of unique aspects of entrepreneurship research rather than unique definition of entrepreneurship, and attention to entrepreneurial process as a core unit of analysis, this research will examine whether franchisees’ activities can be considered as entrepreneurship. According to the Shane model, the entrepreneurial process involves the existence of profitbased (objective) opportunities, risk-taking and some kind of innovation. Nature of opportunity in franchised outlets is closer to Kirznerian's view than Schumpeterian's  view. Sources of opportunities in franchised outlets are not so clear, like the introduction of a new restaurant in a storefront where none had existed before. In Schumpeter's view, according to different types of innovation, franchisees’ operations involve product-market  innovativeness to include market research, product design, and innovations in advertising and promotion. Regarding risk-taking as the third dimension of the entrepreneurial process, franchisees risk their capital. Although it seems in franchise systems that risk for the  franchisee is, to some extent, shared with the franchisor, no franchisor will be able to eliminate the financial, business and personal risk of the franchisees. The franchisor also transfers the risk of expanding into new markets to the franchisees. In sum, franchisees do almost all of the functions of other entrepreneurs, except generating new ideas in the initial step of running a business.

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  • harvard1
  • ieee
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