Despite much of the dominant narrative within media arguing
that franchising and entrepreneurship are very separate
domains, more and more research in entrepreneurship suggests
that franchisees can behave entrepreneurially (Ketchen et al.,
2011). Little is known, however, about how these behaviours
and processes occur within franchising (which “occurs when
a firm (the franchisor) sells the right to use its trade name,
operating systems, and product specifications to another firm
(the franchisee)” (Castrogiovanni et al. 2006, 27-28)). Many
franchisees are bound to follow the rules and regulations of the
franchisor, and this creates constraints on decisions to innovate
and entrepreneurial activities. We evaluate how franchisees
may overcome these constraints through acts of innovation and
“hidden” bricolage (Boxembaum & Roleau, 2011).
Bricolage, defined as “making do by applying combinations
of the resources at hand to new problems and opportunities”
(Baker & Nelson 2005: 333), may be particularly relevant as
established franchising processes restrict innovative activities.
Franchisees may be forced to be resourceful and innovate with
only the resources on hand. Franchisor attempts to suppress
local innovations through withholding resources or by invoking
normative sanctions may motivate greater use of bricolage and
shape the types of innovative behaviour within the franchise
system.
Franchisee innovations created through bricolage, without the
knowledge of the franchisor, are likely to be limited to a single
unit, with unpredictable consequences. Prior research suggests
that bricolage creates innovative solutions that enhance
performance (Garud & Karnoe, 2003) yet others suggest may
create barely “good enough” responses (Ciborra, 1996) limiting
firm performance. These constraints and bricolage processes
(Baker, 2007) by franchisees have not been previously explored
in either franchising or entrepreneurial bricolage literature.
Such research is important. Franchise systems may suppress
growth by not supporting successful innovations, yet face
enormous costs if franchisees ignore the control systems and
create botched innovations within established franchises.
These costs -in damage to the franchise brand, fines, missed
opportunities, and diversion of franchisor attention to deal
with the crises-can ensure franchise failure. With franchising
contributing over $146 billion to the Australian economy (FCA,
2017) decisions regarding innovative entrepreneurial behaviour
in franchising may have broader implications.
Thus, this project seeks to investigate the process of service
innovation in franchise networks, specifically examining
innovation “by stealth”, where the franchisor is unaware that
innovative activities take place. The research objectives are to
• Investigate how organisational control (system rigidity)
influences decisions to innovate and disclose innovations
within the franchise system.
• Explore the role of different types of constraints on
entrepreneurial bricolage behaviours.