The Franchise Dilemma: Entrepreneurial Characteristics, Relational Contracting, and Opportunism in Hybrid Governance

Evanschitzky, Heiner; Caemmerer, Barbara; Backhaus, Christof

Abstract

Using franchise data, we identify that entrepreneurial characteristics of franchisees partially impact on their opportunistic tendencies. Further, relational contracting increases franchisee opportunism by strengthening the opportunism‐enhancing impact of entrepreneurial characteristics. These findings point to a key dilemma franchisors need to be aware of: Entrepreneurially minded franchisees who might be better at exploiting market opportunities for their units may also behave more opportunistically, if given the chance through a more relational contracting regime. At the same time, if they perceive the contractual framework as being too rigid, they may be less able to leverage their capabilities, become dissatisfied, and exit the system.

Citation

Evanschitzky, H., Caemmerer, B., & Backhaus, C. (2016). The Franchise Dilemma: Entrepreneurial Characteristics, Relational Contracting, and Opportunism in Hybrid Governance. Journal of Small Business Management, 54(1), 279-298. https://doi.org/10.1111/jsbm.12145

• Journal Article Type: Article
• Acceptance Date: Jan 1, 2015
• Online Publication Date: Jan 15, 2015
• Publication Date: 2016-01
• Deposit Date: Jun 11, 2020
• Journal: Journal of Small Business Management
• Print ISSN: 0047-2778
• Electronic ISSN: 1540-627X
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 54
• Issue: 1
• Pages: 279-298
• DOI: https://doi.org/10.1111/jsbm.12145
• Keywords: Management of Technology and Innovation; Strategy and Management; General Business, Management and Accounting
• Public URL: http://researchrepository.napier.ac.uk/Output/2667686