Performance implications of centrality in franchisee advice networks

Abstract

International audienceAlthough the literature has provided ample evidence for the decisiveness of the franchisor–franchisee relationship in explaining organizational success or failure, performance effects of franchisee–franchisee relationships remain largely unexplored. Yet a growing body of research indicates that by building interfranchisee relationships, franchisees can form advice networks in the chain. Such networks offer privileged access to resources such as knowledge, information, and best practices that help individual franchisees to become more productive. In this context, we study linkages between a franchisee's centrality in franchisee relationships and various individual performance outcomes, using comprehensive data from franchisees in 3 different chains in the largest European franchise market, France. We find that conditional on the specific governance structure of each chain, the results document a strong impact of centrality in advice networks on franchisee performance. Accordingly, we offer theoretical contributions concerning knowledge-sharing processes in franchise chains, and managerial implications as regards more effective cooperation management in practice, from the perspective of both a franchisee and a franchisor

Knowledge management in franchising: a research agenda

“…Replication strategy and the structure of inertia theory assess the implications of adaptation and exploitation of original knowledge for strategic competence across dynamic contexts (Szulanski & Jensen, 2008;Winter & Szulanski, 2001;Winter et al, 2012). The standardization strategy constitutes the strength of franchising and thus the flexibility to adapt must be communicated during contract formulation to avoid conflicts and failure (Lopez-Bayon & Lopez-Fernandez, 2016;Meiseberg, Mignonac, Perrigot, & El Akremi, 2017). Deviations from franchisor's knowledge is assessed by evaluating the extent of compliance in implementing agreed contractual terms (Brookes, 2014;Szulanski & Jensen, 2008;Winter & Szulanski, 2001) and selling other non-standard products (Winter et al, 2012).…”

Replicate or adapt? Franchising and organizational routines

“…There are two very distinct strategic approaches to franchising (Gillis and Combs, 2009; Gillis et al , 2020; Meiseberg et al , 2017). The first is the plural form strategy, which focuses on growth via a combination of company-owned and franchised outlets.…”

“…Indeed, variations that help local outlets conform to local conditions can improve the chain’s overall fit with its environment (Kaufmann and Eroglu, 1999; Kostova and Roth, 2002). Franchisees that are networked with other franchisees can enhance outlet performance by learning about best practices from other franchisees (Meiseberg et al , 2017). Third, turnkey franchisors stand to gain more from franchisee adaptation.…”

“…Accordingly, questions about how to best transfer organizational routines, and the knowledge embedded within them, are important for understanding the franchising context (Iddy and Alon, 2019). Franchisors must decide whether to adopt a turnkey strategy by selling business opportunities to local franchise-entrepreneurs or to adopt a plural form strategy wherein, in addition to selling business opportunities, the franchisor enters the focal business and operates company-owned outlets alongside franchisees (Gillis et al , 2020; Meiseberg et al , 2017). To take a step toward evaluating whether strategy – turnkey versus plural form in this context – impacts whether routines are replicated or adapted, we investigate the link between franchisor strategy and the franchisee characteristics that they seek.…”

Deferred Tax Assets and Deferred Tax Expense Against Tax Planning Profit Management

“…Mulford and Comiskey (2010) defined as the manipulation of accounting earnings management with the aim of creating the company's performance in order to look better than it actually is (Dhamija, 2017). Earnings management can occur for the preparation of financial statements using accrual basis provides an opportunity for managers to issue accounting considerations which will impact on reported earnings (Gao, 2017;Chiwamit, 2017;Meiseberg, 2017). In this case the revenue can be manipulated through discretionary accruals (Gumanti, 2000).…”