Investment incentives for single and multiple unit franchisees

Abstract

Abstract

Purpose This paper aims to provide a better understanding of the motivational incentives driving franchising choice from the franchisee's perspective. In particular, a comparison of single and multiple unit franchisee incentives is investigated.

Design/methodology/approach A qualitative methodology was adopted to gain a clearer picture of the salient issues influencing an individual's evaluation of franchising options. Both single and multiple unit franchisees within the McDonald's restaurant chain were interviewed.

Findings Major contrasts were identified between single and multiple unit franchisees with regard to their motivations for entering franchising. In addition, franchisees who were previously employed were found to be different to those who were self employed.

Research limitations/implications Because it is difficult to identify potential multiple unit franchisees prior to joining a franchise, it was necessary to interview existing franchisees for this research. It is possible that their post-hoc rationalisations may restrict the value of the research. In addition, motivational disincentives were not examined within this research. However, on balance, the reflections offered by the participants provide a rich and valuable source of information about their motivations.

Practical implications Franchisors need to consider upfront whether they wish to recruit franchisees who remain single unit holders, or select and groom franchisees who show potential for managing multiple units. Thus, franchisors may need to redesign their selection strategies and communication methods to ensure the recruitment of suitable candidates who have the capacity to activate franchisor goals and promote a harmonious franchising relationship.

Originality/value Whereas previous research has investigated motivations for entering franchising, this paper supplements that literature by comparing single and multiple unit franchisee incentives.

Keywords: Motivational incentives, potential franchisees, multiple units, convergent interviewing, McDonald's

Category: Research paper