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The effect of entrepreneurial orientation on the franchise relationship

Research output: Contribution to journalJournal article

Published

Journal publication date12/2013
JournalInternational Small Business Journal
Journal number8
Volume31
Number of pages23
Pages955-977
Early online date20/09/12
Original languageEnglish

Abstract

This article aims to understand how the entrepreneurial orientation (EO) of the franchise system may impact franchisor–franchisee relationship quality, given the conflicting forces for standardization/uniformity and franchisee desire for autonomy. A cross-sectional research design, involving a mail questionnaire survey, was employed to collect data from a sample of franchisors operating in the UK. The hypotheses specified in the study were tested using regression (including moderated regression) analyses. The results revealed that EO was significantly and positively related to relationship quality (as perceived by the franchisor). In addition, the recruitment of entrepreneurial franchisees was found to have a positively significant impact on relationship quality. The structural support systems used by franchisors to encourage franchisee entrepreneurial activities were not found to moderate the relationship between EO and relationship quality. The results suggest that systems with EO and entrepreneurial franchisees may enjoy better relations.