Mixing clicks and bricks in franchise chains:

Mixing clicks and bricks in franchise chains:

The influence of leadership style on franchisee satisfaction regarding

e-commerce and their initial response towards e-commerce.

Master thesis by:

Peter Ballast

S3027457

P.B.Ballast@student.rug.nl

Supervisor: dr. E.P.M. Croonen

Co-assessor: dr. M.J. Brand

Word count (excluding appendices): 19.306

Abstract

A participative leadership style is often associated with a higher change satisfaction of the change recipients than a directive leadership style. However, the underlying reasons why a participative leadership style leads to a higher satisfaction of the change recipients is unclear, especially in a franchising context. It also is not clear what the relationship is between the leadership style used during the implementation of e-commerce and the initial response of the franchisee towards e-commerce. Therefore, this study investigates the underlying reasons for these relationships. The objective of this study is to explain the mechanisms behind the relationship between the leadership style used for the implementation of e-commerce and the franchisees initial response towards e-commerce. The results of this study confirm what had initially been expected: a participative leadership style leads to a higher franchisee satisfaction regarding e-commerce and a more constructive initial response of the franchisee. However, the literature mentions that both dimensions of satisfaction, economic- and social satisfaction, are equally important for the satisfaction regarding e-commerce. The results of this study show that only economic satisfaction is important for the relationship between the leadership style used and franchisee satisfaction regarding e-commerce. For the relationship between the leadership style used and the franchisees initial response towards e-commerce both dimensions of satisfaction are important. In conclusion, the leadership style used does influence the initial response of the franchisees, the more participative the leadership style used by the change agent the more constructive the initial franchisees response.

Key words: Franchising, E-commerce, leadership style, franchisee satisfaction, economic

Table of content

1. Introduction

4

2. Literature review

7

2.1 Definition of core concepts 7

2.1.1 Franchising 7 2.1.2 Electronic commerce 9 2.2 Leadership style 10 2.3 Franchisee satisfaction 14 2.4 Franchisee response 16

3. Method

18

4. Results

27

4.3 Satisfaction regarding e-commerce 31

4.3.1 Relationship with leadership style 35

4.4 Response towards e-commerce 37

4.4.1 Relationship with satisfaction regarding e-commerce 38

5. Discussion and conclusion

41

5.1 Answering research questions 41

5.1.1 Sub-question 1 41

5.1.2 Sub-question 2 43

5.1.3 Main research question 44

5.2 Implications, limitations and future research 45

References

47

Appendix A - Interview Guide

55

1. Introduction

A lot of research has been conducted in the field of change implementation within organizations (e.g. Fedor et al., 2006; Graetz & Smith, 2010; Teoh Kae & Rashad, 2015). However, most of this research neglects the role of leaders within this implementation process which results in the fact that the field of leadership style used during the implementation of a change still lacks empirical evidence (Higgs & Rowland, 2011). Furthermore, previous research mostly focusses on hierarchical organizations with employers as change agents and employees as change recipients and neglects franchise organizations with independent business owners as change recipients. This is a pity because franchise chains have their own dynamic and challenges and this creates a new perspective for the results in a different organizational form (Croonen & Brand, 2015). That is why this research focusses on the leadership style used during the implementation process of an organizational change within franchise chains. The results of this study give interesting insights for franchisors on the relationship between the leadership style used for the implementation of commerce and the influence on franchisee satisfaction regarding e-commerce. Furthermore, this study also explains the relationship between the leadership style used and the initial response of the franchisees towards e-commerce.

Franchising is a contractual agreement by and between two parties, whereby one party (the franchisor) extends the right to the other party (the franchisee) to carry on an independent business under the trade mark or trade name/brand of the franchisor (Felstead, 1993; Webber, 2012). Business format franchising goes even further than selling the franchisor products because the franchisee copies the complete business format in exchange for a fee (Kaufmann & Eroglu, 1999). This form of running a business has its own specific problems such as exclusive territories and controlling the individual units (franchisees). It is remarkable that franchising is such an underdeveloped research field, because it is one of the fastest growing business sectors in the world (Dada, Watson & Kirby, 2012; Dipietro et al., 2007; Perrigot & Pénard, 2013). Franchising is one of the most used business formats for international expansion (Michael, 2003). For example, over the period 2014-2016 the sales generated by franchises in the Netherlands have increased 3.5% since the end of 2013 (Franchise Monitor, 2016). The number of franchise establishments in the United States has grown from 700.000 in 2013 to 745.000 in 2017 (Statista, 2017), an increase of 6,4%.

franchisees often benefit from exclusive territories, whereas e-commerce could be seen as a territorial violation because e-commerce gives franchisors a tool to reach customers within this exclusive territory without involving the franchisee (Emerson, 2010; Kalnins, 2004). That violation might lead to conflicts because franchisees attach a high value to their exclusive territory and they do not like changes that are not beneficial to their own profits (Huizinga, 2014). It turns out that in practice a lot of franchisees are upset about the implementation of e-commerce within their franchise chain. In exploratory studies of Rabobank (2016) and ING (2013) respondents said that they are dissatisfied with e-commerce, especially concerning the balance between costs and benefits. Another big problem is the transparency of the franchisor about e-commerce (Franchise Plus, 2017).

The dissatisfaction concerning e-commerce has led to lawsuits within big franchise chains such as Albert Heijn (Emerce, 2016) and HEMA (Emerce, 2013). This shows that this area is still not completely understood by companies and can lead to dissatisfaction among franchisees. Furthermore, the literature field about e-commerce within franchise chains is still very under developed. Until now, mostly descriptive studies have been conducted and the focus has generally been on the state of e-commerce within franchises and for which purposes franchises use their website (Dixon & Quinn, 2004; Perrigot & Penard, 2013; Rao & Frazer, 2006). Therefore, the dissatisfaction among franchisees cannot be explained on the basis of the literature yet. None of the existing literature focusses on the role of leaders during the implementation of e-commerce in a franchising context. This research fills this gap by researching the influence of the leadership style used during the implementation of e-commerce on franchisee satisfaction regarding e-commerce and their initial response towards e-commerce. This will lead to a better understanding of the mechanisms behind the level of satisfaction of the franchisees and can help franchisors implement organizational changes with more success in the future. This study gives an insight in the relationship between franchisee satisfaction with e-commerce and their initial response towards e-commerce. The conceptual model of this study is displayed in Figure 1 and will be discussed in more detail in the next chapter.

The study of Higgs & Rowland (2011) showed that more engaging and facilitating behavior of leaders lead to more change success than leader centric behavior. This study will research if and how this is also applicable in the context of e-commerce within franchise chains and how the leadership style used

influences the first response of the franchisees towards e-commerce. The focus will be on two diverging and opposing leadership styles: participative and directive. With a participative leadership style the franchisees are involved during the whole implementation process and have influence on the execution of the process while the directive leadership the franchisees only have to execute the set strategy and the change is initiated top-down. This thesis focuses on the following main research question:

“How does the leadership style used for the implementation of e-commerce influence the

franchisee response towards that change, and why?”

This will be the first qualitative study that investigates the relationship between the leadership style used for the implementation of e-commerce and the influence on franchisee satisfaction and the response that follows as a result of that satisfaction. The objective of this study is to explain the mechanisms of the relationship between the two variables of the main research question; leadership style used and initial franchisee response. This research question cannot be investigated without taking a third variable into account: the franchise satisfaction regarding e-commerce. Therefore, two relationships will be studied in this research: the relationship between the leadership style used and franchisee satisfaction and the relationship between franchisee satisfaction and the response towards e-commerce. This results in the following two sub-questions:

• How does the leadership style used influence the franchisee satisfaction regarding e-commerce, and why?

• How does the franchisee satisfaction regarding e-commerce affect the franchisee response towards e-commerce, and why?

Due to the limited time available for this study, the focus will be on franchisees of supermarket chains in the Northern Netherlands who have a transactional website. A case study was conducted for gathering data to answer the research questions. Interviews were held with franchisees from Albert Heijn, Jumbo and COOP.

2. Literature review

As previously discussed in the introduction this research focuses on the relationship between the leadership style used by the franchisor and franchisee satisfaction regarding e-commerce and the influence this satisfaction has on the response towards e-commerce. These relationships are graphically displayed in the conceptual model of this study (see Figure 2) together with the relevant concepts for this study. As can be seen from the conceptual model, every arrow represents a relationship between two different concepts. SBQ stands for the corresponding research sub-question. The first relationship between leadership style and satisfaction regarding e-commerce is expected to be moderated by the location of the stores. The following section will discuss the relevant existing literature regarding these concepts and the relationship between them. First, core concepts such as franchising and e-commerce are explained and introduced. Once these concepts are clear the most important concepts of this study such as leadership styles, franchisee satisfaction and responses towards e-commerce will be explained in more detail. Also, expectations based on the literature about the relationships between these concepts will be discussed and will result in propositions based on the literature.

Figure 2: Conceptual model

2.1 Definition of core concepts

2.1.1 Franchising

to prevent competition between franchisees and company-owned units belonging to the same chain (Combs and Ketchen, 2003).

Business format franchising goes beyond the traditional franchising methods because the franchisee does not only sell the franchisor’s product(s) but also copies the business format. This means that the franchisor licenses the rights and the obligation to copy a unique retail position including support systems, operation instructions, specified equipment and mostly includes access to supplies (Kaufmann & Eroglu, 1999). This makes it a specific form of franchising in which the franchisor allows franchisees to use their business format in exchange for a fee and an agreement that the franchisee will conform to set standards (Blair & Lafontaine, 2005; Combs & Ketchen, 2003; Croonen & Brand, 2013; Davies et al., 2011; Grünhagen & Dorsch 2003). The franchisor stays responsible for managing the system of independent business owners (Kaufmann and Eroglu, 1999; Lindblom and Tikkanen, 2010). Business format franchising is the most commonly used format in terms of number of networks for franchising and therefore best applicable for this study (Croonen, 2006).

2.1.2 Electronic commerce

The mass adoption of internet has made it possible for electronic commerce (henceforth e-commerce) to grow tremendously over the past decade in most business sectors (Dexter et al., 1995). One of the fastest growing sectors is the franchising sector and this sector has recently started adopting e-commerce (Perrigot & Pénard, 2013). This is an interesting development because franchisees often benefit from exclusive territories, while e-commerce could be seen as territorial violation when it is a central website initiated by the franchisor (Emerson, 2010; Kalnins, 2004). This could lead to conflicts because franchisees attach a high value to their exclusive territory and they do not like changes that are not beneficial to their own profits (Huizinga, 2014).

Previous studies show that there are different definitions for e-commerce. Zwass (1996) was one of the first researchers to stress the importance of e-commerce. He defined e-commerce as “the sharing of business information, maintaining business relationships and conducting business transactions by means of telecommunications networks” (p. 3). Wigand (1997) comes up with a similar definition in which he defines e-commerce as any form of economic activity conducted via electronic connections. For this study the definition of Perrigot & Pénard (2013) was used because of the ease and clarity of it. They define e-commerce as an investment in a transactional website, which gives customers the possibility of buying products and services online through a website and thus gives companies a new channel to sell their products.

Unfortunately, not a lot of research has been conducted on the topic of e-commerce within franchise chains as can be seen in Table 1. In this table all the researchers are listed from the last years who have done research in the field of e-commerce and franchising and could be found in the Business Source Premier database. As can be seen in the table, a lot of research is very general and has focused on researching what the state of e-commerce is and for what purposes franchise chains use their website.

Author Focus of research Method

Watson et al., (2002)

They examine characteristics of the retailing industry and try to explain why this industry is particularly suitable for franchising. They also consider the impact of e-commerce on the future of retail franchising. Their focus is on the variables that influence the amount of franchises in an industry.

Desk research in an UK context

Dixon & Quinn, (2004)

Exploratory research into what information is presented on the websites of franchise formulas. Main reason for a website is information for customers (78%). Only 25% use their website for online selling.

Surveys among UK franchisees

Rao & Frazer, (2006)

How Australian franchise organizations adopt internet-based technologies in their franchise system. Only 11% use their website for online selling.

Review websites of Australian franchisees. Cedrola & Memmo, (2009)

The impact of internet on franchising and how franchisors use their websites. Website

Table 1 shows that no key study has researched the influence of the leadership style used during the implementation of e-commerce on franchisee satisfaction regarding e-commerce and the franchisees initial response towards e-commerce. Recent law suits within big franchise chains such as Albert Heijn (Emerce, 2016) and HEMA (Emerce, 2013) have shown that the relationship between the implementation of e-commerce and franchisee satisfaction regarding e-commerce is also still not understood in practice. Due to the lack of research in this field, the dissatisfaction of the franchisees of Albert Heijn and HEMA cannot be explained based on literature yet. The goal of this research is to widen the research field by investigating the relationship between the leadership style used during the implementation of e-commerce and the influence on the franchisee satisfaction regarding e-commerce and their initial response towards e-commerce. This will lead to a better understanding of the why behind the dissatisfaction of the franchisees.

2.2 Leadership style

Today’s society requires organizations which are able to adapt constantly to changing customer demand. Due to technological innovations customers expect different services from organizations than a couple of years ago. Nowadays the majority of customers want the possibility of having their goods ordered online and delivered at home whether it is clothes or groceries. Meeting these demands is challenging for organizations, because online selling is a new way of selling products. If an organization starts with e-commerce it needs to implement certain business processes which are completely different from their current processes.

This study refers to organizational change as the transformation of an organization from its current state to its desired state, mainly with the goal to maintain a competitive position within the market (Teoh Kae & Rashad, 2015). Thus, implementing a platform for e-commerce can be seen as an organizational change. The organization has to be prepared for the change (unfreeze), then the change should be implemented (mobilize) and in the end the desired change has to be solidified (refreeze) (Lewin, 1951). The success of an organizational change is highly dependent on the support and

Perrigot & Penard, (2013)

Determinants for the presence of a transactional website. Which factors increase the change of a transactional website. Retail, hotel and restaurant sectors are most likely to have a transactional website.

Website observation of 486 franchise networks in the US. Perrigot et al., (2016)

Paper deals with development of websites within franchise chains. They consider e-commerce as a new marketing tool to give reasons why franchise chains need to be present on the internet.

Desk research among franchise chains in Europe. Cliquet & Voropanova, (2016)

The higher the proportion of franchised units, the lower the presence of transactional websites in franchise retail networks in France. Focus was on franchise units that sold products via the internet, local distribution and the influence of e-commerce on encroachment problems.

Evaluation of French franchise networks with a logistic regression.

acceptance of employees and their responses towards the change (Fedor et al., 2006; Graetz & Smith, 2010; Piderit, 2000). Recent studies show that only one-third of the change efforts in organizations are successful (Armenakis & Harris, 2009; Croonen & Brand, 2015; Higgs & Rowland, 2005).

Different factors influence the readiness to change and also influence the resistance to change. The four most common reasons against change for change recipients are self-interest, misunderstanding the change, different assessment of the change and some people have a low tolerance for change in general (Ford et al., 2002; Ford et al., 2008; Kotter & Schlesinger, 1989). Self-interest of change recipients means that people think they will lose something of value as a result of the change (Kotter & Schlesinger, 1989). These people tend to focus on their own interests instead of the interests of the organization. Another reason can be that people misunderstand the change and have a lack of trust in the change agent. People might believe the costs of a change are greater than the benefits, which results in a different assessment of the change (Ford et al., 2002; Kotter & Schlesinger, 1989). Close to misunderstanding the change is a different assessment of the change. People assess the costs and benefits from the change differently than their manager or change initiator. They see more costs than benefits resulting from the change (Kotter & Schlesinger, 1989). And the last reason to resist change is because some people have a low tolerance for change in general because they fear they can’t keep up with the change or they do not like to develop new skills (Ford et al., 2008; Kotter & Schlesinger, 1989).

Implementing change in franchise chains can be even more challenging than implementing change in hierarchical organizations because franchise chains consist of a lot of independent business owners who have invested their own financial resources in the organization and thus want to make a profit (Dada & Watson, 2013; Lusch et al., 2003). Organizational changes often require major financial investments and/or adjustments in trade practices without a guarantee of benefits (Croonen, 2010) and therefore is it harder to implement change in a franchise chain, because the franchisees have to trust the franchisor and to perceive the change as fair before they implement it (Croonen, 2010). Besides that, franchisees prefer to have autonomy over their own unit (Dada & Watson, 2013). Another problem within franchise chains is that franchisees have their own exclusive territories and a change implementation, especially one involving e-commerce, could lead to a violation of these territories. Encroachment is one of the most named reasons for dissatisfaction among franchisees (ING, 2013; Rabobank, 2016). Franchisees can react differently towards franchisor-initiated changes. They can react constructively by adopting or advocating the change but it is also possible for them to react in a destructive way and neglect or fight the change (Croonen & Brand, 2015). In the most extreme case, a franchisee can decide to leave the franchise chain.

trust is an antecedent of the social satisfaction of franchisees. Furthermore, the openness in the communication and reliability of franchisor are also antecedents of social satisfaction. Franchisee satisfaction regarding e-commerce consist of social satisfaction as discussed above and of economic satisfaction (Croonen & Brand, 2015). Economic satisfaction refers to a fair distribution between costs and benefits and the profitability of the change. In this study, social- and economic satisfaction together form the franchisee satisfaction regarding e-commerce.

Different studies have shown that higher involvement of change recipients during the implementation of a change lead to higher success of the change (Higgs & Rowland, 2005; Kotter, 1996; Paper et al., 2001), because more involvement leads to a more positive attitude towards the change (Piderit, 2000). Higher involvement of change recipients means that not all the decisions regarding the implementation of the change are taken at the top of the organization, but that less impactful decisions are pushed down to where the work is done in the organization (Paper et al., 2001). This empowerment of change recipients leads to more involvement, but it requires change initiators to be more facilitating and supporting instead of being directive and telling what has to be done (Higgs & Rowland, 2005). Another key feature for developing commitment to a changing organization is an understanding of the reasons of the change by the change recipients. This understanding of the reasons behind a change leads to a better acceptance of the change itself (Lusch et al., 2003). Examining the change satisfaction is relevant because satisfaction leads to a certain response towards that change. These responses will be explained later on in this literature review.

The literature mentions different leadership styles for the implementation of change within an organization. There is growing evidence that the role of leaders in the change process affects the success of the change (Higgs 2003; Higgs & Rowland, 2001; Higgs & Rowland, 2011; Kotter, 1995). Although, the literature about the role of leaders in a change process is growing, it is argued that this area is still lacking empirical research (Higgs & Rowland, 2011). This is especially true about the literature that focusses on leadership during a change process in a franchise context.

the ideas for the change come from within the organization and not only from the board. These changes are comparable with the slow changes from Kotter & Schlesinger (1979) and therefore will be named ‘slow changes’ in this research.

Higgs & Rowland (2005) combine the type of change with a certain type of leadership that is needed. Different scholars argue that a more participative leadership lead to higher change success (Higgs, 2003; Higgs & Rowland, 2005), which in this study means a more constructive response towards the change. Higgs & Rowland (2005) found that for fast changes a so-called shaping leadership style increases the likelihood of a successful change. With a shaping leadership style the focus is on what the leaders say and do and people follow the instructions they receive without giving any feedback. This works well with a change that is initiated at the top and where the employees or franchisees are expected to follow (Griffin & Stacey, 2005). In the study of Somech (2005) this type of leadership is named a directive leadership style and he described this leadership style as providing a framework for change recipients for decision making in alignment with the vision of the leader. This combination between a fast change and a directive- or shaping leadership style will be called a directive leadership style in this study for ease of use.

For the opposite, slow changes, a framing leadership style is more suitable according to Higgs & Rowland (2005). Within this style, a leader sets a starting point for the change and helps to design and manage throughout the whole change, but is open for feedback and input from their employees and franchisees. This type of leader also communicates about the guiding principles of the change to add structure to the change (Griffin & Stacey, 2005). Close to the framing leadership style of Higgs & Rowland is the participative leadership style of Somech (2005). He defines this type of leadership as joint decision-making with the change recipients which is close to the definition of Higgs & Rowland (2005). Therefore, both leadership styles in combination with a slow change will be named a participative leadership style during this research.

Directive leadership style Participative leadership style • Clearly planned. Little involvement of

change recipients during the implementation

• High involvement from change

recipients during the implementation of the change

• The changes are mostly initiated at the top of the organization (Top-down approach)

• Changes are initiated anywhere in the organization (bottom-up and top-down) • There is no room for feedback from

change recipients • Change recipients are actively asked for feedback during the implementation process

Table 2: Characteristics of the two leadership styles

2.3 Franchisee satisfaction

Franchisee satisfaction is a topic broadly covered in the literature (Abdullah et al., 2008; Altinay et al., 2014; Hing, 1995; Mellewigt et al., 2011). Maintaining a harmonious relationship between franchisor and franchisee is one of the key elements for growth and success of a franchising system (Floyd & Fenwick, 1999). Increased franchisee satisfaction leads to a reduction in conflicts between both parties which leads to increased channel efficiency (Abdullah et al., 2008). E-commerce within franchise chains is expected to lead to lower levels of satisfaction because it is likely that the franchisor and franchisees have different interests (Abell & Scott, 2000). Franchisees would like to protect their exclusive territory, while e-commerce can be a violation of this territory (Dixon and Quinn, 2004). Also, a lot of franchisees are not satisfied with the balance between costs and benefits (Rabobank, 2016; ING, 2013). Almost 60% of the dissatisfied interviewed franchisees in the study of the Rabobank (2016) indicate that they are not happy with the current balance between costs and benefits of e-commerce. In their opinion, the costs are too high compared to the benefits. These results are supported by a study of ING (2013).

This study focusses on franchisee satisfaction in regard to e-commerce. To my knowledge this type of satisfaction has not been researched before, but it is believed that the same indicators apply for franchisee satisfaction regarding e-commerce as well as for general franchisee satisfaction because in both cases it is about whether expectations of the franchisees are met. Davies et al. (2011, p326) define franchisee satisfaction as ‘the positive perception of franchisees meeting or exceeding their economic and social expectations from the franchise working relationship’. This definition shows that the previous mentioned distinction between social- and economic satisfaction can be made. This distinction is also made in the research of Geyskens et al. (1999). In this research franchisee satisfaction regarding satisfaction is measured in two different forms; social- and economic satisfaction. Satisfaction regarding e-commerce here refers to a combination of social and economic satisfaction.

antecedents for social satisfaction. Open and transparent communication about e-commerce is the third antecedent. In this study communication entails the willingness to exchange ideas (Wichers, 2017).

Economic satisfaction could be measured in terms of trust and profitability according to Geyskens et al. (1999). Since the level of trust has already been measured as being a part of social satisfaction, it is left out when measuring economic satisfaction. Geyskens et al. (1999) also left trust out as being part of economic satisfaction and measured trust as being part of social satisfaction: “We can imagine situations in which, despite the lack of trust, the parties are satisfied with the economic aspects of the relationship. However, it is harder to expect that trust exists in the face of dissatisfaction with the relationship on noneconomicaspects” (p. 234). Therefore, profitability is the first antecedent for economic satisfaction in this study. Profitability refers to the amount of profit that is made from the change in monetary terms. A second antecedent comes from the study of Lafontaine & Kaufman (1994), who use the balance between inputs and outputs as an antecedent for economic satisfaction. In their study, they aim at the fairness of the balance between inputs and outputs, which is supported by the study by Wichers (2017). Thus the second antecedent in this study for economic satisfaction is the balance between the costs and benefits of the change. This refers to the amount of work and money a franchisee has to put in and the benefits they receive in monetary terms but also to other benefits such as customer loyalty.

Based on the literature it could be expected that a participative leadership style would lead to a higher franchisee satisfaction with regard to e-commerce. For a participative leadership style a more open and transparent communication is needed because all the parties involved need to dispose over all the available information to enable them to make the best decisions. It also shows trust towards the franchisees that they are involved in the decision making which increases the trust of the franchisees towards the franchisor. This leads to higher social satisfaction of the franchisees. Furthermore, because the franchisees are involved in decision making they can reflect on the cost/benefit balance and help to improve this balance. This should lead to increased economic satisfaction. Overall, it can be expected that a participative leadership style would lead to a higher franchisee satisfaction with e-commerce and thus the following proposition can be formulated based on the literature:

Proposition 1A: A participative leadership style leads to a higher franchisee satisfaction regarding e-commerce than a directive leadership style.

E-commerce is an opportunity for franchisees from villages to gain revenue from nearby cities as mentioned by De Vries (2016). It gives franchisees in villages a greater potential market area and therefore one would expect that they are easily satisfied with e-commerce when compared to franchisees located in cities who have to deal with a lot of competition. Also, it is likely that franchisees in villages feel less involved within the franchise chain than franchisees in cities because the stores in cities are generally bigger and thus more important for a franchise chain. Therefore, if the franchisor involves the franchisees from villages in the decision making process regarding e-commerce, this would make them feel more involved and thus it can be expected that proposition 1A is stronger for franchisees located in villages than for franchisees located in cities. Therefore, the following proposition is formulated:

Proposition 1B: The relationship between the leadership style used for the implementation of e-commerce and the franchisee satisfaction regarding e-e-commerce is stronger for franchisees located in villages than for franchisees located in cities.

2.4 Franchisee response

The expectation is that the extent to which the franchisee is satisfied with the implementation of e-commerce will affect his behavior (Wichers, 2017). The initial reaction of franchisees that are satisfied with the plans for e-commerce will not be very exciting, because they are likely to stay and will mostly react constructively. On the other hand, the initial reaction from dissatisfied franchisees is much more interesting to investigate. All possible reactions are described by the base of the EVLN-typology, which stands for Exit, Voice, Loyalty and Neglect (Hirschman, 1970; Rusbult et al, 1982).

The four reactions are based on two dimensions. The first dimension is about the intent of the response. This can be constructive or destructive. This is displayed on the x-axis in Figure 3. Constructive means that the reaction was positive towards the change, while a destructive reaction is negative towards the change. The second dimension is the form of the response. This can vary between an active or passive reaction. This is displayed on the y-axis. Active means that the franchisees actively contacted the franchisor while passive means that there was no contact at all about this implementation and it refers to the impact of the behavior on the change (Rusbult et al, 1988).

The first two reactions discussed are the constructive responses. Loyalty is a passive but constructive reaction towards the proposed change. With this reaction, the change is accepted and no further actions are taken. Even when the franchisee is dissatisfied with the change no further action is taken because the hope is that the future will bring better times (Hagedoorn et al., 1999). Another possible reaction is speaking up (Voice) against the change. The goal of this reaction is to speak about and discuss the change with the hope that some adjustments will be made that make the change more favorable (Hirschman, 1970). Looking for solutions to the problems can also be considered Voice. Both reactions are supportive towards the change.

The most extreme reaction is to leave the franchise chain or do not participate in the change (Exit). This will be the case when someone is totally dissatisfied with the change. Rusbult et al. (1988) defined the exit option wider as just leaving the organization or not participating in the change, in their opinion exit is also when someone starts to look for alternatives or even thinks about leaving the franchise. In this research Exit refers to the franchisees who do not participate in e-commerce initiated by the franchisor. The final possible reaction is Neglect. This is not a direct reaction to the change, but a more negative reaction towards the complete relationship because the change recipient starts being destructive in their relationship with the change agent. For example, skipping franchise meetings on purpose or refusing to discuss other problems. It’s some sort of silent protest. Both reactions, Exit and Neglect, are examples of destructive reactions.

An extra reaction in addition to the classic EVLN-model was added by Croonen & Brand (2015). In their study they discovered that there was a group of franchisees who didn’t react to the changes according to the existing responses of the EVLN-model. These franchisees waited to see what happened before adopting a response. Croonen & Brand (2015) called this ‘response’ ambiguity and placed it between constructive and destructive on the passive side in the EVLN-model (see Figure 3).

Which reaction is chosen is dependent on different factors such as the satisfaction of the franchisee in general, the satisfaction with e-commerce and the investment size (Rusbult et al., 1988). Furthermore, the readiness to change will also influence the initial response of the franchisees. The readier a franchisee is the more constructive he will respond. Franchisees who are not ready will most likely resist to the change (Ford et al., 2008). This study is only focused on the franchisees satisfaction with e-commerce divided in economic- and social satisfaction. Investment size and readiness to change are left out on purpose due to the limited time available for this research.

constructive response compared to franchisees who are less satisfied. This led to the following proposition:

Proposition 2: The higher the franchisee satisfaction regarding e-commerce, the more constructive the franchisee response will be.

3. Method

The literature review showed that the research field about franchise chains who have adopted e-commerce is underdeveloped, especially the ‘why’ of the relationship between the franchisees perceived leadership style that is used during the implementation of e-commerce and the influence on franchisee satisfaction with e-commerce and their initial response has not been explained in the literature before. That is why exploratory research is useful for this study (Yin, 2014). Theory development is the most suitable approach for this kind of research (Eisenhardt, 1989; Van Aken, et al., 2012). The method used in this study for creating a new theory is a multiple case study, which is an appropriate method for exploratory research according to Eisenhardt (1989) and Yin (2014). To structure this research the seven proposed steps for building a theory from case study research of Eisenhardt (1989) have been followed. These steps are graphically displayed in Figure 4 and are explained in more detail later on. Step eight of Eisenhardt’ steps is not applicable for this study, because the aim of this study is not to build a framework and therefore step eight is left out. However, the results could lead to an adaption of figure 1 (conceptual model of this study). The following section will give a detailed description of the data collection and data analysis methods used in this study and explain the followed steps in more detail. In the last section of this chapter the controllability, validity and reliability of this study will be evaluated.

Figure 4: The seven steps of Eisenhard (1989) for building theory from case study research

3.1 Data collection

(Yin, 2014). These differences and similarities gives guidance for conclusions based on the results of this study.

After the research question has been made clear, the next step is to select appropriate cases. The population used for this research are Dutch supermarket chains who use a franchise structure and have implemented a transactional website. Discount supermarkets are not in the interest of this study, because service is not as important for them as for other supermarkets and they mostly do not franchise. Another important issue is that the selected supermarkets have to represent both leadership styles and therefore the participating franchise chains are not selected at random. Based on these requirements and theoretical replication the following three supermarket chains have been selected: Albert Heijn, Jumbo and COOP. These three chains are the bigger supermarket chains in the Netherlands measured in turnover (Distrifood, 2017) and the number of supermarkets (Top 10 lijstjes, 2016) they have as can be seen in Table 3.

Albert Heijn Jumbo COOP

Number of stores (Distrifood, 2017)

849 584 257

Percentage of stores that is franchise owned (Franchise Plus, 2017)

30% 60% 55%

Marketshare (Distrifood, 2017)

35,2% 18,4% 3,1%

Table 3: Facts about Albert Heijn, Jumbo and COOP

because they are a cooperative and thus have to cooperate together to be successful. All the franchise chains will be described in short in the next paragraph.

Albert Heijn was founded in 1887 and is therefore the oldest still operating supermarket chain in the Netherlands. The supermarket is named after its founder Albert Heijn who took over the supermarket from his father in 1887. In 1952, Albert Heijn became the first supermarket where customers could help themselves instead of being served one by one. Their focus is on superior products and quality stores which gives them the image of being one of the more expensive supermarkets. Despite the fact that Albert Heijn is seen as more expensive than other supermarket chains, they are currently the market leader in the Netherlands with a market share of 35.2% (Financieel Dagblad, 2017). Notable about this franchise chain is that only 30% of the stores is franchise-owned.

The second biggest supermarket chain in the Netherlands is Jumbo. It’s also one of the younger supermarket chains as it was founded in 1921 by Johan van Eerdt. Striking for Jumbo is that they are a family owned business. They are in the top five of the biggest family companies in the Netherlands (Consultancy.nl, 2016). The company has grown fast over the past years through the take overs of Super de Boer and C1000. Most of their stores (60%) are franchise-owned. Their formula is based on the biggest annoyances of customers, which resulted in low prices, a big assortment and the best service.

Compared to the other two chains COOP is relatively small. The cooperative COOP was founded in 1891 as an answer to the high prices in supermarkets at the time. The fact that COOP is a cooperative makes it remarkable that ‘only’ 55% of their stores is franchise-owned and thus 45% of the stores is company-owned. This is remarkable because in a cooperative organization people unite themselves to meet their shared goals and thus one would expect a higher percentage of franchise-owned stores because they are independent business owners. The formula of COOP stands for located near their customers, tasty and cheap. They fill the gaps Albert Heijn and Jumbo leave open, such as the smaller cities.

reason for not cooperating was that they were too busy. This low percentage of franchisees who refused to cooperate improves the representability of this study.

All the franchisees interviewed are located in the north of the Netherlands. It was important to have an almost equal balance between franchisees from cities and villages to test for location differences and improve representability. Therefore, of the nine cases selected for this study there are four from a city and five from a village. In this study a city has a population of more than 50.000 people and a village has a population of less than 50.000 people. Furthermore, within each franchise chain at least one village and one city has to be represented. Given the knowledge and experience (on average 15 years) of the franchisees interviewed in this research, they are able to reflect on the questions about the implementation of e-commerce and franchisee satisfaction. Although there is a split between the three franchise chains, all the cases will be treated separately, because all the cases are equally important to the research (Eisenhardt, 1989).

The third step is to craft the instrument and tools used to measure the variables. Because the ‘why’ of the relationship between leadership style, satisfaction with e-commerce and response towards e-commerce hasn’t been researched before, it is needed to do qualitative research in order to gather useful information (Eisenhardt, 1989). Therefore, this study will use primary data which is gathered through semi-structured interviews with franchisees from the previous mentioned franchise chains. Due to the limited time of this research, only qualitative data is collected, but that is sufficient for a case study (Yin, 1984) to make assumptions about the underlying reasons of a relationship (Eisenhardt, 1989).

Variables

Information needed/ values

Measurement

information Background information such as: how long they have been a franchisee, why this formula, how many units do they own and their history before they became franchisee and how they see their future. Also a question about the relationship between franchisee and franchisor. Background regarding e-commerce: how long transactional website, financial agreements with franchisee about e-commerce and franchisee response towards plans for e-commerce.

General information

B. Leadership style Asking for the different characteristics of both leadership styles: Involvement of franchisees, where was change initiated, role of management team, feedback possibility.

Directive or passive (Kotter & Schlesinger, 1979; Higgs & Rowland, 2005)

C. Satisfaction regarding e-commerce

Asking for scores on the satisfaction regarding e-commerce divided by economic- and social

satisfaction (Geyskens et al., 1999; Rodriquez, 2006), satisfaction in general (Davies et al., 2011) with franchisor, satisfaction with e-commerce, satisfaction development over past years. The antecedents for social satisfaction are: reliability of the franchisor, openness of the communication and trust in

franchisor. Antecedents of economic satisfaction are profitability and the cost/benefit balance.

General satisfaction and satisfaction with implementation of e-commerce. Scores from 1 to 5. D. Franchise response to e-commerce implementation

Asking about the first response of franchisee towards e-commerce. Possible reactions are; exit, voice, loyalty, neglect or ambiguity. Based on the axis constructive/destructive and active/passive. Focus is mostly on the intend of the reaction.

EVLN-model (Hirschman, 1970; Rusbult et al., 1982)

E. Other General questions to end the interview such as if there is information missing which could be relevant for this research and if they want to receive the end result.

Finalizing interview

Table 4: Framework for formulating interview questions

3.2 Data analysis

Steps five till seven are part of the data analysis. This is the most vital part of research, as it forms the heart of building theory from case studies (Eisenhardt, 1989). The fifth step is actually analyzing the cases. First, the cases are analyzed separately which helps to cope with an overload of data. The idea behind this within-case analysis is to become familiar with each standalone entity. This helps the unique patterns of each case to emerge. Analyzing each case will be done based on the characteristics found in the literature study. Furthermore, based on the literature review different patterns are expected, these patterns are compared with the patterns found in the cases of this study. Once the cases were analyzed, the results were put in a table to make the results clearer. After the cases were analyzed individually, the results were compared to the other cases from the same franchise chain. This gave insights in the main issues for each franchise chain.

After the cases and franchise formulas were analyzed individually, the different cases were compared to each other. To ease up this analysis all the individual cases were placed in a table with the main results from each case such as perceived leadership style, average satisfaction and their response towards e-commerce. This was useful for the cross-case analysis of all the cases and made it easier to find the differences and similarities in all the cases. Cross-case analysis is very useful because the selected cases used different implementation methods. This gave insights into patterns and enhances the probability of developing a theory that is reliable and precise (Yin, 1984). It helps to improve the understanding of the relationships researched in this study. Based on both analyses, conclusions about the why of the relationships between leadership style, satisfaction regarding e-commerce and the response towards e-commerce are drawn.

After the analysis, certain relationships began to emerge between the variables researched in this study. The next step is to translate these relationships into propositions and to explain the why of this relationship based on the analysis as described before. This helps to improve the internal validity of the research (Eisenhardt, 1989). In this research the relationships are interpretations of the researcher because it is a theory development research and thus it is not possible to run statistical tests. Moreover, this isn’t a problem as long as the evidence and procedures are clearly displayed, which is done in this method section (Eisenhardt, 1989).

3.3 Quality criteria

The most important research-oriented quality criteria are controllability, reliability and validity (Swanborn 1996; Yin 1994; Van Aken et al., 2012; Yin, 2003). These are important because they provide the basis for inter-subjective agreement on the research results. In this section the quality of this study is evaluated and these three quality criteria are discussed.

3.3.1 Controllability

Controllability means that it is clear how a research is conducted. Others should be able to replicate the study. Also, controllability is a prerequisite for the evaluation of the validity and reliability of a study (Van Aken et al., 2012). Due to the detailed description of this study in the method section the controllability is improved. All the steps taken are described which enables other researchers to replicate the study and to judge the reliability of the results. During the research notes are taken about unforeseen events and other important issues and all the interviews are transcribed, which helps to improve the controllability (Strauss & Corbin, 1998). In addition to the notes and the clear method section, the results are presented as accurately as possible (Swanborn, 1996; Van Aken et al., 2012). This is achieved by asking others to critically read the results.

3.3.2 Reliability

“The results of a study are reliable when they are independent of the particular characteristics of that study and can therefore be replicated in other studies” according to Yin (1994) and Swanborn (1996). Key words for reliability are transparency and replication (Gibbert et al., 2008). In general, the reliability is improved due to good and careful preparations of the data collection (Gilbert et al., 2008) by means of following the steps of Eisenhardt (1989). There are four possible sources of bias: the researcher, the instrument, the respondents and the situation. The problem with interviews is that they are more dependent upon the personal characteristics of the researcher than written surveys (Van Aken et al, 2012). This bias is minimized because the researcher is from an independent organization (university) and all the interviews are recorded and transcribed so that the actual answers are written down and not the interpretations of the researcher himself. Furthermore, one researcher did all the interviews and therefore interpretation of answers is the same during all interviews. To give guidance during the interviews the advice of Van Aken et al. (2012) is followed and the interviews are semi-structured (i.e. standardized).

This study is designed to learn from the perspective from the franchisee and thus respondent reliability is less of an issue, because the interviewees are all franchisees and thus give a good representation. The only differences in perspective in this study are between the number of units a franchisee has and the locations their units are located in (city or village). More units lead to a different perspective compared to fewer units and the location also leads to a different perspective. Respondents are not selected at random, because a mix of villages and cities is needed for good representation. It is likely that franchisees in villages have a different perspective on e-commerce than franchisees in cities, because in cities there is mostly competition from other units from the same franchise chain while in villages mostly only one unit of the same franchise chain is located.

The last reliability issue is the situation. To increase this the interviews were held at different times and on different days of the week varying from the early morning to late in the afternoon to make the study more independent of the different circumstances (Van Aken et al., 2012). All the interviews took place in a closed room and the recordings were deleted once the interview was transcribed, so people feel freer to speak.

3.3.3 Validity

Validity is the third major criteria for the evaluation of research results. A research is valid when it is justified by the way it is generated and therefore presupposes reliability (Audi, 1998; Van Aken et al., 2012). The three types of validity distinguished in this research are construct validity, internal validity and external validity. All three are discussed in the next section.

Construct validity

Internal validity

Research is internally valid when conclusions about relationship are justified and complete (Van Aken et al., 2012). This is improved by using theoretical triangulation: viewing a problem from multiple theoretical angles (e.g. leadershipstyle and satisfaction). Also, the results from the interviews are compared with the literature for pattern matching (Yin, 1994; Gibbert et al., 2008). Furthermore, the results are presented in a systematic way and analyzed with within- and cross-case analysis methods among different franchise chains. This enables us to verify the findings by using different perspectives (Gibbert., 2008).

External validity

4. Results

This section presents the results of the nine interviews that have been conducted. The transcripts on which the results are based can be found in Appendix B. In order to give a clear presentation of the results, the results for each variable will be discussed separately first and later on the relationship between the variables will be discussed. The variables are discussed in the same order as they have been asked during the interview. In the first paragraph the background information of all the cases is shortly discussed. This is an overview of the general information of all the cases. After the background information, the three variables of this research are discussed and interpreted. This analysis of the variables is done on three different levels; first all the cases are analyzed individually, then all the cases of the same franchise chain are compared to each other and lastly all the chains and cases are compared with each other. The first two levels are within-case analysis methods and the last method is a cross-case analysis. This latter analysis is done to understand the relationships between the variables better. The respondents have been granted anonymity and therefore the company names Albert Heijn, Jumbo and COOP are replaced by one of the following names: Franchise A, Franchise B or Franchise C. This is done in a random order so that the results cannot be traced back to the respondents or to a company. For a clear overview of the most important results discussed in this chapter they are displayed in Table 5. In the next paragraphs is zoomed in on the different parts of the table and are the results explained in more detail.

Table 5: Overview results (scores on a 5-point Likert scale)

4.1 Background information

Case Chain number Location Total years _franchise 1 Franchise A Village 20 2 Franchise A Village 17 3 Franchise A City 10 4 Franchise B City 2 5 Franchise B Village 20 6 Franchise B City 21 7 Franchise C City 7 8 Franchise C Village 15 9 Franchise C Village 20

Table 6: General information about the respondents

Out of the nine respondents only two had a voice in which franchise formula they could join. The other seven didn’t have a choice due to the take-overs of their previous formula. The other two who did have a voice were also taken over, but they were free in their choice because they didn’t have any contracts remaining with their previous franchisor. The reasons behind the choices for their current franchise formula are: “The best financial deal” and “We didn’t want to be the smallest supermarket within the chain, because then we would have no influence in the decision making.” The franchisees who participated in this study varied from having one or two stores within the same franchise chain, but none of them had more than two stores.

Most of the respondents have always worked in the supermarket branch and started at the bottom as a stock clerk and grew through different functions to the position of franchisee. Others respondents started their career outside the supermarket world and became involved in the supermarket branch later on. For most of the franchisees their family was already involved in the supermarket branch. In the near future, none of the franchisees had the intent to sell their store(s), but none of the franchisees want to open another supermarket either. The most common reason for this is: “that would distract me from my current store” as respondents 2 and 3 mention. Within all three franchise chains there are currently franchisees active who have another business next to their supermarket.

low compared to the costs they make: “This compensation is not enough to cover all our costs, but it is already better than it was in the beginning.”

Company B is currently following an e-commerce strategy that doesn’t involve their franchisee stores. All the orders that are placed online are picked at a central distribution center and from there delivered to the customers at home or to a pick-up point chosen by the customer. This strategy looks similar to that of company A, however in this strategy the pick-up points are not located in supermarkets but in central places in cities or villages. This means that the complete e-commerce strategy of company B excludes their franchisees, even in their own exclusive territory. Franchisees do not get a compensation for this loss in turnover. Moreover, franchisees do not even know how much turnover they loss, because the franchisor is not transparent about financials regarding e-commerce. This is reflected in the following quote of Franchisee 4: “Currently do we not know how much the franchisor earns with e-commerce, because they don’t show us financials about the turnover in our exclusive territory.” Company B is currently working on this as they are now testing with franchisee stores who have a pick-up point in their store. One of their goals is that the company gets a good idea about a fair compensation for the stores.

A completely different strategy is followed by company C. Customers must first select the location where they want to pick up their order before they can proceed. After the supermarket is selected the range of products which can be bought online is adjusted to the assortment of the selected store. Once the customer has placed an order, this order is sent to the selected supermarket who will collect the order in their store. After the order is collected by the supermarket, the customer can collect their order in the store or it is delivered at home if that is possible at the selected supermarket. In this strategy the complete turnover and costs are for the franchisees. Franchisees only have to pay a compensation for the website which is the same regardless of store size.

4.2 Leadership styles

Table 7: Scores for perceived leadership style

Two out of three franchisees of Franchise A perceived the leadership style used by the franchisor as participative and the other one perceived it as directive. Both Franchisee 1 and 3 indicate that they experienced a lot of involvement from the corresponding work group during the implementation of e-commerce. The decision for e-commerce was a combination between top-down and bottom-up according to Franchisee 1 who stated: “The idea for e-commerce came from top-down and bottom-up […] There are always franchisees interested in some field of expertise and they look for new opportunities such as e-commerce.” The reason why Franchisee 2 is scored as directive is because he described that the idea for e-commerce was initiated at the top with no further influence from the change recipients on the implementation process. Remarkable about the interview with Franchisee 2 is that he didn’t mention the work groups at all.

All the franchisees of Franchise B perceived the leadership style used as directive. They all agreed that the plans for e-commerce were made at the top of the organization without any involvement from the franchisees. This goes even further as they mention that the whole e-commerce strategy is developed and executed without the involvement of the franchisees. As Franchisee 4 noticed: “Even the FAC didn’t have a say in the implementation.” This is confirmed by Franchisee 5 who adds that this is not only the problem with e-commerce, but with more organizational changes. Franchise B decides the changes first and later informs the FAC. Communication is referred to as a “One-way-street […] Meetings are just informing.” by Franchisee 6.

Concluded based on the results can be that according to the expectations Franchise C follows a more participative leadership style, while Franchise B follows a more a directive leadership style. Also, as expected Franchise A is somewhat in the middle of both type of leadership.

The location of the supermarket does not show significant differences for the perceived leadership style as can be seen in Table 8. For both locations, the perceived leadership style is almost equal. Franchisee 7 scored the perceived leadership style participative and directive and therefore is the first row scored with halfs.

Table 8: Comparison location supermarket and perceived leadership style (scores on a 5-point Likert scale)

4.3 Satisfaction regarding e-commerce

After analyzing the data about the different satisfactions of the franchisees measured in this study it is notable how satisfied all the franchisees in general are with their franchise chain and that most of them are completely dissatisfied about e-commerce. All the scores on the questions about satisfaction (Section C of the interview guide) are displayed in Table 9. The interviewees were asked to score these questions with a grade between 1 (very low) and 5 (very high). Based on all the scores given the average grades are calculated and displayed in Table 9. The average grades are compensated for the questions which haven’t been scored by the franchisee. This paragraph starts with discussing the satisfaction regarding e-commerce as scored by the franchisees themselves and later on in this paragraph is zoomed in on the two dimensions of the satisfactions regarding e-commerce; social- and economic satisfaction.

Table 9: Scores for the satisfaction regarding e-commerce (scores on a 5-point Likert scale)

The three franchisees of Franchise A are very satisfied with the formula in general. “The formula is good, but there is always room for improvement” according to Franchisee 1 as he explains why he scored general satisfaction a 4 out of 5. As the grades show most of the franchisees are less satisfied with e-commerce. Only Franchisee 2 scores e-commerce a 4 with the explanation that e-commerce is currently missing a good business model and that he therefore didn’t score it a 5. As all three franchisees mentioned e-commerce is currently a loss, which explains why the profit share and costs/benefits are scored low. According to Franchisee 1 and 3 e-commerce still has some technical issues: “Time slots customers can pick up their orders are full very fast (Franchisee 3)” and “Some orders are not fully complete and thus we do need to collect the missing products in our store (Franchisee 1).” All three franchisees definitely see the organization as a trustworthy partner for organizational changes such as the implementation of e-commerce.

Most of the franchisees of Franchise B are generally very satisfied with the formula. Only Franchisee 6 is somewhere between satisfied and dissatisfied. All franchisees have been acquired by Franchise B in the last years and mention that their satisfaction was very low right after this take-over because they were used to totally different structures and strategies. Furthermore, Franchisee 5 and 6 had a big loss of turnover due to this take-over, which negatively influenced their satisfaction. Despite this dissatisfaction in the beginning under the umbrella of this formula the satisfaction did grow for all the franchisees to the current level. All the franchisees of Franchise B are negative about the implementation of e-commerce and the profit share. Compared to the other two franchise organizations the franchisees of Franchise B are very dissatisfied about the communication regarding e-commerce. They describe their organization as very closed in their communication. For example, none of the franchisees knows how much profit is made with e-commerce. This is illustrated by the following quote of Franchisee 5: “There is no transparency about the financials regarding e-commerce.” Although the franchisees describe their organization as not being transparent and open in their communication about e-commerce, they do trust their franchisor to implement organizational changes such as e-commerce.

and the absence of innovations within the formula as is illustrated in the following comment: “Franchise C has now reached 2006 with their IT systems […] they are far behind the technological possibilities.” However, Franchisee 7 is dissatisfied about most of the elements, he is very satisfied about the communication regarding e-commerce. He describes this communication as open and clear, especially at the end of the year in the annual report. Franchisee 8 and 9 are both very satisfied with the formula and about e-commerce. Although Franchisee 9 is satisfied about e-commerce in general he does score the profit share and cost/benefit balance an insufficient grade. Franchisee 9 has the suspicion that nothing is earned with e-commerce, but didn’t calculate this loss. Franchisee 8 and 9 do see Franchise C as a trustworthy partner.

The average satisfaction scores for the franchise chains have been calculated and are displayed in Table 10. Overall the general satisfaction of all the franchisees is quite high with an average score of 4.2. According to Table 10 the franchisees of Franchise A are the most satisfied with their formula in general. Remarkable about the averages is that the franchises of Franchise C are most satisfied with e-commerce, but that their general satisfaction is the lowest. This could be explained because franchisee 7 is very dissatisfied and therefore could influence the average which results in distorted numbers. Franchise A and B do score low on the satisfaction regarding e-commerce, especially the profit share and cost/benefit balance is low. These two dimensions of economic satisfaction are also low for Franchise C. For most franchisors the communication about e-commerce is quite right. Also the social satisfaction (trust) is high among the franchisees. The next paragraph will discuss the social- and economic satisfaction in more detail.

Table 10: Average satisfaction scores (scores on a 5-point Likert scale)