Perception of Creativity in International Franchising Business Concepts - Comparison Analysis Between Franchisees and Franchisors This paper deals with the topic of creativity and perceived freedom of creativity in international franchising business concepts. It analyses various areas of daily business operations and the franchising business concept as a whole. Its focus is aimed at comparing the perception of level of freedom given in these areas to franchisees by the franchisors and its objective is to find out where these perceptions differ (...) between franchisees one side and franchisors on the other. The model of franchising is not described and the article assumes that the reader is familiar with this business model. The purpose of this article is to analyse and present the situation of creativity in the sector of international franchise businesses. As international franchising is in the focus of this article, topics such as cross-cultural environment in franchising models and creativity across cultures are covered. The method used to collect the data for further analysis is running an empirical research among two populations - franchisees and franchisors from several franchising business concepts active in international environment. Representatives from the two populations were asked to evaluate the level of freedom of creativity given or applied in their franchising business concepts. Respondents were answering an online survey, assessing ten different areas in daily business on a scale from one to five, ranging from no creativity allowed and strict governance by rules defined in the franchise concept to high level of creativity and freedom. Findings from both side of the franchise business partnerships, franchisees and franchisors, are presented including the test of homogeneity of proportions. Therefore some implications exist for further discussions and research, if franchising at all is, in its essence, a method of business concept, which enhances and facilitates creativity, or if creativity is perceived as a danger to franchise system that would harm its global unified approach which is the key principle of the franchis unified brand and concept strategy. (shrink)

Corporate social responsibility (CSR) activities have become increasingly prevalent in retail settings. In franchised organizations, franchisors typically design and coordinate these activities, leaving operational execution to franchisees. Meanwhile, franchisors may introduce new corporate-led CSR activities over time. Even though changes to CSR activities may refocus outlets’ attention on a CSR initiative, they may also disrupt an outlet’s ongoing CSR routines. Using a longitudinal, secondary dataset consisting of an eight-year panel for a national, franchised restaurant chain, we examine CSR performance dynamics (...) in the presence of two distinct types of CSR activities: an ongoing CSR routine and a distinct, temporary CSR campaign. We find that, when resuming the CSR routine after a temporary CSR campaign, outlets’ performance in CSR routines drops significantly (i.e., immediate decay), then improves gradually (i.e., protracted recovery). We also consider the moderating role of an outlet’s experience, finding that experience stabilizes these decay and recovery cycles. Our findings represent a first step in developing a longitudinal understanding of how a firm’s short-term CSR campaigns may impact ongoing CSR routines, thus contributing to the knowledge of CSR activity development and routinization. (shrink)

McDonald’s, the renowned American fast-food giant, views the Middle East as an immensely promising market, yet one that presents formidable challenges. McDonald’s experienced the complexity of this region firsthand when its Middle East franchises became embroiled in a public dispute over the divisive and emotionally charged Israeli-Palestinian conflict. This case study explores McDonald’s political and ethical predicaments in the Middle East, examining the underlying causes of the backlash, dissecting the dynamics between franchisees and franchisors, and providing some potential remedies.

Franchising in the business format sector accounted for approximately 35 percent of retail sales in the U.S. in 1991. Consequently, the franchising industry has a clear ethical responsibility to the public. At the same time, there exists an ethical obligation of the two major factors in the industry — the franchisor and the franchise — toward each other. Because the franchise agreement, which is the basis of the relationship, is originated by the franchisor, an asymmetrical distribution of power (...) often exists, resulting in opportunistic behavior by the franchisor. In other cases, questionable or unethical practices by franchisees likewise result in conflict. This paper examines some of the basic areas of the franchise relationship which result in conflict, and discusses the situation analysis in business format franchising, which shows promise for reduction of conflict and unethical behavior for the future. (shrink)

Following a series of national protests in support of an increase in the federal minimum wage, many fast food workers faced retaliation by their employers when they returned to work; schedules were changed, wages and hours were reduced, and some employees were terminated. These retaliatory actions resulted in a number of complaints being filed with the National Labor Relations Board alleging violations of the National Labor Relations Act. Several of the complaints were found to have merit and, additionally, in several (...) instances both the immediate employer, the franchisee, and the corporate organization of which it was a part, the franchisor, were named as co‐defendants. This ruling—that franchisors like McDonald’s USA—could be held jointly responsible for the labor violations of independent franchisees reversed a long‐standing precedent, whereby franchisees were regarded as independent contractors solely responsible for day‐to‐day labor practices, including compliance with federal and state labor statutes. Critics of the ruling argue that it will open the door to unionization and may well spell the end of the service‐sponsor franchising format. Supporters of the NLRB argue that the ruling is just and reflects new “industrial realities” in retail labor markets. Further, a case can be made that the NLRB’s position represents a step in the direction of the restoration of more equitable balance of power between labor and management. (shrink)

A very important challenge for franchisors is adapting the strategies of their franchise systems to new threats and opportunities. During such strategic change processes (SCPs) franchisees are often required to make major financial investments and/or adjustments in their trade practices without any guarantee of positive benefits. It is, therefore, important that franchisees trust their franchisors during such change processes and that they perceive the change process as fair. This article aims to generate theory on franchisees' perceptions of trust and fairness (...) during SCPs. On the basis of case studies regarding eight change processes in four Dutch drugstore franchise systems, this article distinguishes different levels of franchisee trust and discusses five instruments that franchisors can "institutionalize" in their franchise systems to influence their franchisees' trust and fairness perceptions. (shrink)

The article considers franchising as a tool for market penetration and presence on it and also provides its main advantages, in tourism and hospitality sector in particular; examines the role of franchising for tourism enterprises within the contemporary economic system; pays attention to organizational culture as a factor of franchising development in the travel industry ("TUI GROUP" case study). On the basis of employee survey the key problems are revealed associated with neglecting the importance of organizational culture formation and recommendations (...) on overcoming these problems are offered. (shrink)