When do franchisors select entrepreneurial franchisees? An organizational identity perspective

• Published in: Journal of business research 2016-12, Vol.69 (12), p.5934-5945
• Main Authors: Watson, Anna, Dada, Olufunmilola (Lola), Grünhagen, Marko, Wollan, Melody L.
• Format: Article
• Language: English
• Subjects: Behavior; Data collection; Entrepreneurial franchisee selection; Franchise system performance; Franchisees; Franchisor support; Organizational identity; Studies
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2016.05.006

In spite of the acknowledged importance of the franchisee selection process, only a few empirical studies have examined this research area. This paper employs organizational identity theory to explain when the franchisor desires to select specifically franchisees that have the potential for entrepreneurial behavior. A mail questionnaire survey was utilized to collect data from a sample of franchisors in the UK. The results revealed that the systems that select entrepreneurial franchisees are those that have entrepreneurial values as part of their organizational identity, as reflected in the institutionalized support given by the franchisor for entrepreneurial activities. Additionally, we found that the performance of the franchise system is positively affected where the franchisor seeks to select franchisees whose entrepreneurial values are congruent with those of the system. •Organizational identity theory is used to explain franchisee selection criteria.•Franchisors can create entrepreneurial identity through their support systems.•Entrepreneurial franchisees are recruited by systems with entrepreneurial values.•Franchise performance is positively impacted by congruence in entrepreneurial values.