The franchise dilemma: entrepreneurial characteristics, relational contracting, and opportunism in hybrid governance

Heiner Evanschitzky*, Barbara Caemmerer, Christof Backhaus

*Corresponding author for this work

Research output: Contribution to journalArticle

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.

Original languageEnglish
Pages (from-to)279-298
Number of pages20
JournalJournal of Small Business Management
Volume54
Issue number1
Early online date15 Jan 2015
DOIs
Publication statusPublished - Jan 2016

Bibliographical note

This is the peer reviewed version of the following article: Evanschitzky, H., Caemmerer, B., & Backhaus, C. (2015). The franchise dilemma: entrepreneurial characteristics, relational contracting, and opportunism in hybrid governance. Journal of small business management, 54(1), 279-298, which has been published in final form at http://dx.doi.org/10.1111/jsbm.12145. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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