JED, Vol. 19, No.2, August 2017, pp. 107-122
Drivers of Performance of Franchisees: A Multi-level Analysis
Abstract:The aim of this study is to examine the drivers of performance of franchisee organizations.
Adopting agency theory, we hypothesize that age, size and obligatory assortment decided by
central franchisors, distribution of power from franchisors to franchisees and frequency of
franchisor’s visits to franchisee are positively associated with the performance of franchisees.
The survey data of 186 franchisees in four European countries are used to test the proposed
hypotheses. Principal component analysis and a hierarchical linear model are applied in this
study. Empirical results reveal that whether the proposed hypotheses are statistically supported
depend correspondingly on how franchisees’ performance is measured. The paper provides some
implications for franchisee literature.
Keywords:Age; franchisee performance; obligatory assortment; power; size