Early-Stage Franchisor-Franchisee Relationships

Abstract

The study investigates the relationship between the franchisor and the franchisee at the early-stage of the life of the franchisee contract. Earlier research suggests that this tends to be a fairly warm relationship based on the initial excitement, enthusiasm and hopes of the franchisee (Nathan 2004). Such a "glee" relationship was confirmed by our results. An ethnographic methodology was used to capture the voice of the parties in greater depth. Thus although the relationship was one of glee, there were issues that had to be worked through that may be missed in normal survey methods. The way the franchisees handled uncertainty and the work-home time balance are cases in point. Another major finding was the importance of the wider support network. This included the distant, figurehead role of the franchisor as an inspiration to franchisees and the more immediate and proximate peer support system. Implications were drawn for franchisors developing more effective relationship systems and a more effective business culture.