The Effective Delivery of Franchisor Services: A Comparison of U.S. and German Support Practices for Franchisees

Abstract

Conventional wisdom suggests that more services offered by franchisors should lead to fewer complaints from franchisees, and that franchisees ought to be better off with additional support provided. We set out to differentiate those services that are truly effective and are perceived as beneficial by franchisees from those that may have little effect or may even be perceived as counterproductive. Our survey targeted franchisors in the U.S. and in Germany, comparing the most mature franchise market globally to one that is relatively young. System disruption was found to be dependent on the maturity of the market, as little differentiation is provided in the very mature U.S. market, but considerable differentiation exists in the younger German market. Also, the size of the system matters, as bigger systems typically provide more services. Finally, different types of services have varying levels of effectiveness in the less mature franchise market in Germany.