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Franchisiinnt gh eR ealE statAeg encSye ctor: MultipPleer spectives and ConvergiAnngg leosf I nquiry A thesis submititnepd a rtfuilafill ment oft her equiremfeonrtt hsed egreoef DoctoorfP hilosophy SusaFnl int-Rartle MasseUyn iversity 2007 Abstract Thitsh eisnisvste tiegtash wei derseappdh enomoefnfao rncnh isiinn gt hees traetael agensceyc tToord .a tfearn,c hisriensge ahracsbh e elna rgmeullydt iiis pclinary, expnlaatotrhye orreyl atuinvdeelvye alnotdph eedhr aebs e ehne avrye lioannt chee poionfvt i eowft hfearn chiTshoitrsh. e bsriosa diennvse sttiogi antcilmouundl et iple perspecotfbi ovtethsh efar nchiasnodrf r nachisIetee x.a mitnheeis m portant contrimbaudtteiot o hnre e latiboybn osthphiat pri aenstd h nea tuorfte h epiarrl aell busivneenstsu ring. Drawionndg a tcao llefocrtmte hdme a irne aelst tea francohpietsrioanirgnNs e w Zealanfdor mas nadml pesfr aonhfci sbeues ionwensesir nts h Aes iac-iPfiraceo gni, thset uudsyea ps r gamatmiicx meedt hodoalpopgriocIaatclb h ei.lvs ie bedy b rkeiang thqeu antittraiattdiitvohene conmaptluaernxed ssepcetcocirhf aitrcea rciosft ics frnachisciabnneg b etutnedre orosdTt.w oi nltiern ked asrtueun ddeiretsFa ikresnt., thfern acihssop re'rspeocfft rniacvhei isesix nagm ianneaddw indsotwu idusys etdo illruastteth en otioofnr esoucrocmep etency.f arnScehciosanisdn ,g an entrepreatncievumiraitiaynl flo rymt hfern achipsoetieo n fv ieewx paenxdiss ting debate flarinhnciksiwiningttg hh e en treprednoemiuarns.h ip Iti sa rgutehdat th set treagdiecc istiofo arnnc hitsaek beynr eaels taatgneec y farnchirseoqrusai w riedse r neaxtptilohana nfe roebfdy currenatn rdae gseonucrcye scarcity stuhcecooreffysa rn.sc hTihisenit nhsgie sc tor oins dtbheaevs eeldo pment ofa sophitsetrdie scoaucrocmep ettehnaectny s uar heisg helvyo lvseudsi,tn aing relatiwointsthhh fiearp n chiasnedpe e rpteitouinan ttoh mea tugrreo wpthha se. Frahnicsgi snsytemasr e deafisne endt reepurreionarlg anisianwt hiiocnhs co­ operabteitowne end iftrfeweont ty poefse netprrenteaukrpe lsa Tchee.fa r nchisor inittetisha sey staenmdb uiltdhbser awnhdi tlhefe ar nchidseevoeep ltsh e local markTehtu.vs a liucser eaatsee ndt reprveennetuurrieeasslt aabrlaein flsdoh uerdi sh. Frnachisaonrdfars n chisaemeaslg aimnantoiev oanatsn dfar nchisdeeeevlsot ph eir ownr esoucrocmepne ctieceosm mpelnittaort yhp ea reonrtg aniTsoagteitohwnei.rt h thep eopilnev olwveeadl,ct rhe atainodin n novaptriovcee asnsdea sc tiitvies undertbaybk oetnph a rtiinte hsre e latifornnacshhiipsi,inr n egae ls taagteen icsy showtnob efu llcyo mpatwiibtehln et reprrsehcnioepnu sttsr.u c Acknowleendtgsm Ia mi ndebttome yd supeArnvnidese Bo rru,i n ismwy hf oir enadn d academmeinct Hoerrc. o sntrucctriivteia cnirdes amgd oyo hdu mour helpteogd u imdeet hrougthhpoiruseot sc s. LarRroys hea gsi vseonu anddv iacnedd i recatniodot nha ecra demic colglueehasa vlee tnhte einrc ouraagnesdmu epnpto rt, Eelslpeenc ially Rosweh o vgeernye rhoeulslpmyeea d ta v itsatla ge. Bys hartihnegti irma en de xpereisme yni cndusctoerlaylg uheasv e madteh riess recpaho ssainbIdla em e xtremelyt oHg arractoeufurlt s NewZ ealfaorn dt ohpeeinrn aenwsdis il nlgnteoes nsg awgietm he . Myf aimlIya,Vn i,c taonrGdia aer tahn,fd re indhsa vlei stmeandeed , sugsgteiofnorsg,i vmeynw eaksnseeasn dh elpkeedem pe i nt ouch witrhe laeli. f Thank all. you 11 TABLEO FC ONTENTS page Abstract Acknowledgements 11 TabolfeC ontents 111 LisotfT ables IX LisotfF igures X Chapter 1.I ntrucotdion 1.1S coopfte h e Study 1 12. ConatneAdxp tp roaches 4 13. Jusctaitfifiorot nhR ee srecah 5 14. A Worodn T erminology 6 15. FranchBiacskignrgo und 7 15..1Th eC oncoefFp rtna chising 8 15..2R eaEls tAagteen Fcrya nchising 10 16. ReaEls tAagteen icnNy e w Zealand 12 16.1. FranicshiinnNg e wZ ealRaenaEdl sa ttAeg ency1 4 17. AngloefIsn quiry 15 18. Lmiitations 16 19. Strucotfu rTtehh ees is 17 2.S tarndisnt hRee aElst atAeg enacnyd F ranicshing Litetruear 21. Introduction 21 2.2 A SelectoifRo enaE lst aAtgee nLctiye rature 21 2.12 .AgeSnte lecatnEidfo efnc tiveness 22 2.2A.g2e nt Efficiency 24 2.2.Do3A genPtrso vaiQ duea lSietryv ice? 30 2.2.C4om petiinaFn ige rCcoemlpye tEintviivreo n3m2e nt 2.2.Fa5c iCnhga nge 34 2.3 FranchSirtstaiengTgyh :e oreDteivceallo pment 38 23..1Ag enTchye ory 38 2.23 R.esource TShceaorrcy ity 42 2.4 ReaElsa ttAeg enFcryca nhisAi Dnigv:e rse TheorePteircsaple ctive 45 2.4U.p1p Eecrh eTlhoeno TrhyHe-u maEnlm eenitn DeciMsaikoinn g 48 2.4R.e2s ourceT-hBeaosreyd 50 2.4I.n3s titTuhteioornya l 51 111 2.5 ChapCtoenrc lusion 53 3.T heE nterperneurPiearlsc pteive 3.1I ntroduction 56 32. DoetshE en trepreCnoenucreiptathlA e gF eintSc eyc tor?5 6 32.1.E ntrepreOnpepuorritiauntlnh iRete yaE ls tate Market 58 3.2B.e2iE nngt repreneurial 59 33. ThEen trepre-nFeruarnsscihhNniiegpx uLsie:tr ature Relentvt aot hSet udy 61 33..S1t aogfGe r owth? 64 3.23 .TQhuee stiForna nocfIh nidseepee ndence 65 3.4 Co-orpaetEinvter epreneurs 68 34.1.O peratTieoanmawloi rnRk e aEls tFartaehn icses 69 34..N2e twoarnkSdsy mbiRoetliact ionships 71 35. ThEen trepreFnreaunrcOihraignlsai ets iaoCnop:ro rate EntrepreinnAe cutrisohni p 74 3.6 ChapCtoenrc lusion 75 4.R esrecaAhp proacanhd M ethodolPorogciecsasle s: PrUen drestanding 4.1I ntroduction 77 4.2 MyR olaesR esearcher 80 4.3 UnderlKynionwgl eCdlgaei ms 81 4..3C1o sntrucotrIil lvuissttr ative? 82 4..3P2o stpositivism 82 4.3P.r3a gmatism 83 4.4 A MixeMde thoAdpspr oach 84 44..T1h Eex polratSoerqyu eMnitxieMadel t hDoeds ign8 6 4.4D.a2tI an terpretation 89 4.5 The FraPnecrhsipseocrt ive 90 45..I1n tervFireawinicsnhogr s 90 4.25T .hWei ndSotwu dy 93 4.35I .suseosf Reliability 94 4.6 ThFer anscePheei rspective 95 4.7 PhaOsnee -TQhuea litAaptpirvoea ch 96 4.17D .oitnhgRe e srecah 97 4.7I.su2se osf Reliability 100 4.8 PhaTsweo -TQhuea ntiAtpaptriovaec h 120 4.18T .heS urveGyr oup 120 4.28T .heS urveIysn trument 140 4.8I.s3s oufRe esl iability 170 4.38..C1o ntVeanlti dity 170 4.8.Co3n.tsr2u Vcatl idity 180 4.8.Ex3t.e3Vr anlail dity 190 4.9 Developomfte hInent t erGvuiiedfweor Bs o thP hases 190 IV 41.0 ChapCtoenrc lusion 101 5.T heF ranhcsiorP erscptei:Fv reanchiSstairtnegg y 5.1I ntroduction 131 5.2 FrancPheirssopre ctives 131 52.1. MarkSehtra e 151 52..2Ow nership 171 52..3Ac uclturation 191 52..4Pa lrlaelainFsdo mc us 121 52..14P .arlaellism 121 52.4..F2o cus 132 52..F5r anscoUhrni iqRuees ouCrocmpee tency 142 52..6In tetrinoanalisBartaiAnofdfin l iaantdi on 162 52..7Fr ahnicsPoerr speesSc:ut mimvray 172 5.3A WindoSwtu dCyo:r poErnattreee purresanhnidp ReosurCcoem petienAn cctyi onH-aTrhceo urts ReaElsa ttGer oup 182 53..I1n troduction 182 53.2. ThHea rcoCuorprtosr aOtreg anisation 192 53.3. A ShoHritos rtoyft hHea rcourts Grou1p0 3 5.43 T.hHea rcoGurrotuRspe souCrocmeept ency 123 5.431.. AcceerlaItTeT: e chnolCoogmipceatle 1n7c3 y 5.43..2C ompaSntyr ucture 183 5.43..3Ta regteFdr ahnicsSeuep port 104 54. WindoSwt yu:dS ummary 104 5.5C hapCtoenrc lusion 141 6. TheF rancihsePee rscptei:Qv eualatiitSvteu dy 61. Introduction 134 6.2P haOsnee T:h Pe ercepotfRi eoaEnlss t Aagteen cy Franchisees 144 62..T1h eS ampDleem gorpahic 154 6.3P haOsneeF indiTnhgEesm :e rgTihnegm es 164 63..I1n dependence 174 6.13..G1r owPtlha ns 105 6.132.. InnovBautsiivneMe esthso adnMsde asure1s35 63..211.. Marketing 145 63...12.H2u maRne srocuMea nagemen1t6 5 63...12.T3e amasn Edx teArnlalli ance1s85 6.3C.o2n nectedness 195 6.231.. Relationship Quality 106 6..32.I2m portoaftn hBcere a nd 136 6.3E.n3t reprePneertucireoipnals 156 6.33..R1i sTka king 166 6.3.C3o.m2p etitiveness 176 6.3.P3a.sV3te ntures 176 6.4C hapCtoenrc lusion 186 v 7.T heF ranicshePee rscptei:Qv euantaittiSvteu adnyd Synetshis 71. Introduction 171 7.2 Examinoaftt hiMeoe na sureTmoeo-nlEtx paltoorry FactAonra lysis 127 7.12F .actLoora dings 167 7.3 FrancPheirstceieeop AnnsO :bj ectViivepewo int 108 7.3T.h1eF r ancShaimspeel e 108 7.4 PercepotfBi eoinanFs gr anchisee 148 74..W1h y nFcrhaise? 148 7.4F.a2c toofIrmsp orttaoFn rcaeni cshees 168 7.4G.e3n eSraatlai cstfwiiotnFh rn achising 198 7.4F.r4a ncRhaitsionrg 109 7.4T.h5Ue s oef C ompoFsaictteto oMr esa sure FrancVhailsueees 129 7..451 .WhaMta ttienBr uss iness? 129 7.4.H5o.wD2 o etshF er ahnicsRoatre ? 139 7.5 ArFer nachiEsneterse preneurial? 159 7.6 MeasuErnitnrrgee npeuFraicatlo rs 169 7.16 I.nntoivoan 169 7..62A utonaonmDdye pendence 199 7..621. Autonomy 199 7.26..D2e pendence 201 7.36 P.ersonBaulns eiasVnsad l Pueer tcieopns 203 7.46 R.isTka kiPnrgo pensity 204 77. SecndoaFriyn dings 207 7.17M .ulOtfifi cOew nership 207 77..P2r iPoerr saonnCdau lr rOeffnciteI ncome 209 77..F3r ancAhgiesE,ed eu cation, QualifiacnaGdte inodnesr 210 77..T4h Iem portoafFn rcaheni csEexep eenrcie 212 7.8 Limttaiioonftsh Qeu antiFtiantdiivneg s 214 7.9 PhaTsweo: S ummary 216 71.0 Synetshoifts h Tew oP hases 271 71..01 TheS amples 218 7.01.2 ThIe nterGvuiieadwne Sd u rvIenyus mternt2 19 71.0.3 FindainnIdgn sfe enrces 220 71.0.4 AutonaonmDdye pendency 222 71..05 Innovation 226 71.0.6 BeiEnngt repraelTn,ae kuiRrniigsa kn d CreatWienagl th 227 71.1C hapCtoenrc lusion 229 VI 8.C onclusion 232 81. ImpclaitifoorIn nsd ustry 248 8.2 ThFeu ture 250 Reefernces 256 AppendAi:x Metohdolo(gCyht aep4r) 314 A4.1F rancIhnifsoorrm Sahteieotn 341 A4.2F ranchCiosnosrtesoAn utd iotape 315 A4.3F raincsIhonrt erview Guide 315 A4.4F rancFhaicsStohe re t 317 A4.5P haOsnee F:r ancIhniofsremteai oSnh eet 318 A4.6F ranscehIein terGvuiiedwe 391 ApepndBix: FranicsheQeu ailtiavtSet u(dCyh ap6t)e r 323 B61. ThDe ependTerneNceoe d Meo deClr eaitnNev di v7 o 323 B6.2D atQau eSreya rcihnNe vsi 7v o 342 B6.3A MatroifGx e ndAetrt riabnuIdtn edse dpeennce MeasubryGe rdo wthI nannodv iantN ivoinv7 o 342 AppendCi:x FrancihseQeu nataittiSvteu (dCyh ap7t)e r 325 C71. PhaTsweo S:u rvIenys trument 325 C7.2Th Ce atSeclrlTe ees t 331 C7.3K MOa nBda rtTleestattnP sdr incipal ComponeAnnta lsyE:sx itroanMc ettihod 332 C7.4R otaCtoemdp onMeanttr ix 333 C7.5Re aElsa ttQeu alifications 343 C7.6S e-lefmplioNfyo eFtdr anchised? *M aiRne astooFn r anchise 335 C7.7F actoofIrmsp ortianBn ucsei tneoFs rsa nsceheis 335 C7.8A Summrayo fF ranscoRhraii tngCsom:p osite Factors 335 C7.9I tsh Ceu rrVeentntu trehF er ansce'he Fisi rBsuts iness Venture? 336 C71.0M aiRne astooFn r ahnicsAeuet:o nomy? 336 C7.11N umboefrY eaFrrsa nc*hY iesaereCs u rirne nt Organisation 337 vu C7I.2F eeloifnD egpse ndency 338 C7I.3R easoofBn e comaiR negaE ls tFartaen chisee 339 C71.4F ranchisee oPfTe hreOciwernpF tiirPomen orsrf mance 340 C7I.5P erceptFiaocntIsom rpostof ar tnott hFer anchisee inB usiness 341 C7I.5I.mlp roBvuisnigna neLdse sa rning 341 C7I..52Sh raeD ecisions 342 C7I..5E3a rnL otosfM oney 343 C7I..5A4c ocmmodDaotmee sCtoimcmm ietnts 344 C71.5.D5e lgaetRee snpsoilbiity 345 C7I..5C6a sSeu mmaries 346 C7.1a E6xperiFernachneicdsS exieY :e aPrlsu s 346 C7I.b6 Numboefr OfHfiecleds 346 C7I.7S ePlefr ceptions 347 C7I..7CIr oTsasb uolnHa toiwd oy oSue Yeo ur?s*e lf Age 347 C7I7. .C2r oTsasb ulPaetricoenop ftS iefol?n *R eaEls tQautael ifications 348 Vlll