ICT Support and Trustworthiness Assessment in Franchise Systems: the moderating role of Franchisees’ Personal Characteristics

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ICT Support and Trustworthiness Assessment

in Franchise Systems: the moderating role of

Franchisees’ Personal Characteristics

– word count: 10.397 –

Name: Hendrik ter Stege

Student nr: S3506479

E-mail: H.ter.Stege@student.rug.nl

Date: 24-06-2019

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Abstract

The overall purpose of this study is to determine the effect of franchisees’ characteristics on the relationship between ICT support and trustworthiness assessment in a franchise system. By doing so, this study contributes to the article of Croonen & Broekhuizen (2017) by verifying their arguments and deepening their findings. So far, personal characteristics have not been examined on the relationship between ICT support and trustworthiness assessment. This study used survey data from 103 franchisees of a Dutch franchise system. The results indicate no significant evidence for a moderating effect of personal characteristics on the relationship between ICT support and trustworthiness assessment. However, marginally significant evidence is found for a relationship between franchisees’ perceived ICT support and trustworthiness assessment concerning their franchisor. Furthermore, this study found that propensity to trust is significantly related to trustworthiness assessment. Finally, both control variables are significantly related to trustworthiness assessment. To be more specific, relationship duration is negatively related to a franchisees’ trustworthiness assessment concerning their franchisor. In contrast, subjective performance shows a positive relationship towards a franchisees’ trustworthiness assessment regarding their franchisor.

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Introduction

Information communication technology (ICT) is a popular topic in the current business environment.

This is acknowledged by the CEOs of the ‘Fortune 500 companies1_{’ that perceive “the rapid pace of}

technological change” as the single biggest challenge (Murray, 2016). These rapid changes emerge from various areas in ICT. Currently, blockchain, quantum computing, augmented analytics, and artificial intelligence receive a lot of attention among businesses that invest in ICT (Gartner, 2019; Forbes, 2018). However, ICT is not only about these emerging technologies but also about the use of technologies in another fashion. For instance, the use of social media technologies to obtain a better understanding of the customer or process improvements through digitization which supports employees by making tasks less complicated (Westerman, Bonet & Mcafee, 2014). However, these examples are just a ‘tip of the iceberg.’ The popularity of ICT is also noticed in the academic world. Throughout the years, various research streams emerged that describe the role of ICT in the organizational strategy, creation of value, operational support, adaption/implementation or the impact on performance dimensions (Banker & Kaufman, 2004; Boudreau & Rose, 2000; Acton, 2012; Oliveira & Martins, 2011). This study is interested in the operational support that is provided through ICT. This study defined ICT support as any electronic device or technology that has the ability to gather, store, or send information (Steinmueller, 2000) to improve the current situation and better manage the processes in the organization (Balocco, Ciappini & Rangone, 2013).

The literature shows that the role of ICT Support is studied in many different areas and contexts, e.g. nursing, education and the impact on firm performance (Toro & Joshi, 2012; Fagerstrom, Tuvesson, Axelsson & Nilsson, 2017; Inkinen, 2016; Barba-Sánchez, Martínez-Ruiz & Jiménez-Zarco, 2007). ICT support proves to be beneficial for the acquisition of new relationships, communication, firm performance, and other organizational purposes (Barba-Sánchez et al., 2007; Inkinen, 2016). This study examines franchisees’ perceived ICT support concerning their franchisor. Franchising is a business strategy in which there exists a contractual relationship between the franchisor and a franchisee. The franchisor allows the franchisee to operate under his trademark or business format to produce or distribute a product/service (Caves & Murphy, 1976; Lafontaine, 1992; Kaufman & Eroglu, 1998; Combs et al., 2004; Davies et al. 2011). There are several reasons why further research is needed towards ICT support in a franchising system. First of all, franchisor support is an essential topic in franchising. Several studies explain that franchisor support is vital for problem-solving, maintaining operational standards, and to make sure that franchisees perform well under their brand (Roh & Yoon, 2009; Ramaseshan, Rabbanee & Burford, 2018; Grace, Weaven, Frazer & Giddings, 2013; Nyadzayo, Matanda & Ewing, 2015). Secondly, ICT support seems to be underexposed in franchising research compared to other areas of research (Brooks, 2012). As previously explained, ICT support proves to be

1_{Fortune is a global media organization that publishes articles about businesses. ‘Fortune 500’ is a list of}

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beneficial and is seen as an important mechanism for the franchisor and franchisee. This is recognized by Boulay (2012), who explains that ICT support is seen as a useful tool for rapid expansions of the franchise network with lower staff overheads. Furthermore, Paswan & Wittman (2009) found that ICT support is beneficial for the communication and transfer of knowledge within the franchise system. This results in more efficiency for both parties and lower costs for the franchisor. Another vital advantage that results from ICT support is the ability for the franchisor to monitor his franchisees more easily (Brooks, 2012). However, ICT support is not only beneficial for franchisors but also for franchisees. Moreover, franchisees are easily updated about the latest developments, able to exchange information in the network, and communicate with other franchisees. Furthermore, it is argued that their ICT support provides them tools for their transactional services, CRM systems, and website (Brooks, 2012; Croonen & Broekhuizen, 2017; Kasper-Fuehrer & Ashkanasy, 2001). Finally, this research builds on the franchising study of Croonen & Broekhuizen (2017) by deepening their findings. To be more specific, their arguments and findings will be verified concerning perceived ICT support.

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Secondly, this study wants to verify the findings of Croonen & Broekhuizen (2017) with regard to the moderating effect of educational background. The results reveal that, for franchisees with a higher educational background, the relationship between ICT support and trustworthiness assessment becomes negative rather than positive. In contrast, for franchisees with lower educational background, the relationship between ICT support and trustworthiness assessment is positively influenced. A possible explanation for the different outcomes is that higher-educated people are more critical and have a better belief in their capabilities (Croonen & Brand, 2013). As a result of this finding, one could also argue that higher-educated people gained more knowledge and skills; thus, automatically become more critical about the received support. In line with this reasoning, this study expects a similar criticism as a result of a high desire for autonomy, low propensity to trust, and high industry experience. Finally, the dataset contains information about a company that highly depends on its internet services. Moreover, franchisees make contact with their customers through ICT supporting services, and their website basically functions as their business card. In summary, it is considered important to further examine this relationship, which brings us to the following research question:

“What is the effect of personal characteristics on the relationship between ICT support and trustworthiness assessment?”

This study aims to contribute to the study of Croonen & Broekhuizen (2017) by deepening the understanding of the relationship between perceived ICT support and trustworthiness. This study looks at the role of three new moderating variables that represent personal characteristics of the franchisee. By looking into these new moderating variables, it is not only possible to deepen our understanding, but there is also a chance to verify the arguments made in the article of Croonen & Broekhuizen (2017). Another contribution can be made towards the study of Brand & Croonen (2013) who argue that ICT is an determinant in the antecedents of ‘trust’. Hereafter, the study continues with a literature review including hypotheses, methodology section, results, and finally, the discussion & conclusion.

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Literature review

Franchising

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ICT Support

ICT support is defined as “any electronic device or technology that has the ability to gather, store, or send information to improve the current situation and better manage the processes in the organization” (Steinmueller, 2000; Balocco, Ciappini & Rangone, 2013). The existing literature describes several benefits that result from ICT support such as an increased transformation of knowledge, reduction in costs, improved communication, streamlining internal & external processes, ability to monitor & control processes and, allowing businesses to operate beyond traditional boundaries (Kasper-Fuehrer & Ashkanasy, 2001; Inkinen, 2016; Barba-Sánchez et al., 2007; Bharadwaj, Sawy, Pavlou & Venkatraman, 2013). Despite these advantages, there are also disadvantages that result from ICT support. First of all, it takes a certain time before the technology is imbedded in the organization. Thus, it also takes time before the firm benefits from the new technology. Secondly, through the increased accessibility2_{, employees perceive more stress which is accompanied by a larger chance on} conflicts. Finally, the investment in ICT usually costs a large amount of money and is often not finished after the first investment (O’Driscoll, Brough, Timms & Sawang, 2010; Day, Paquet, Scott & Hambley, 2012). However, within franchising, the emergence and benefits of ICT are not unnoticed but compared to other business areas, one could argue that the topic is underexposed. Brooks (2012) shares this finding by explaining in similar words that more research should be conducted towards ICT support. So far, there are (to the best of my knowledge) five articles that studied the role of ICT support within a franchising context. These articles studied the role of ICT support as a governance mechanism or the impact on knowledge management, relationship management and trustworthiness assessment (Brooks, 2012; Boulay, 2012; Croonen et al., 2016; Paswan & Wittmann, 2009; Ramaseshan et al., 2018). These studies provided similar results as they explain that ICT support stimulates an efficient/effective knowledge transfer, a reduction in costs, and an improvement in communication. Furthermore, it is explained that ICT may reduce threats such as information asymmetries which is an important topic within franchising (Boulay, 2012). Finally, ICT support allows a rapid expansion of networks with lower staff overheads and is seen as a useful mechanism in bridging time and distance barriers (Kasper-Fuehrer & Ashkanasy, 2001; Brooks, 2012). One could conclude that both literature streams (inside and outside franchising) come up with similar benefits and disadvantages. This study focuses on how franchisees perceive the support in ICT.

2_{With accessibility is partially meant that through ICT it is easier to contact each other inside/outside the}

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Trustworthiness

Trust is an essential aspect in franchising for a healthy relationship between the franchisee and franchisor. This is confirmed by Bordonaba-Juste & Polo-Redondo (2004), who found that higher levels of trust lead to a positive long-term relationship, better firm performance, and a higher satisfaction rate. Another result that is caused by a high level of trust is that it deals with a great extent with contingencies in the environment that may not be formulated in formal contracts. As previously explained, the relationship in a franchise system is characterized by several traits such as information asymmetries, goal conflicts and power games (Boulay, 2012; Davies et al. 2011; Croonen, 2010; Croonen & Brand, 2013). Formal contacts deal with a large extent of these challenges, but there are always contingencies that are not included. Informal mechanisms become essential and thus, ‘trust’. (Davies et al., 2011; Cochet & Garg, 2008). The definition of ‘trust’ by Mayer, Davis & Schoorman (1995) is adjusted to a franchise perspective by Croonen & Brand (2013) which results in: “the willingness of a franchisee to be vulnerable to the actions of its franchisor based on the expectation that the franchisor will perform particular actions important to the franchisee, irrespective of the franchisee’s ability to monitor or control the franchisor”. One could conclude that, based on this definition, franchisee trust in the franchisor highly depends on perceptions instead of clear-cut facts. This is recognized by Croonen & Brand (2013) who explain that a party A’s (Franchisee’s) trust in party B (Franchisor) is the result of (1) the characteristics of party A (Franchisee), or more specifically party A’s (Franchisee’s) propensity to trust, and (2) party A’s (Franchisee’s) assessment of the trustworthiness of party B (Franchisor). The next paragraph will focus on the trustworthiness assessment in the franchisor by the franchisee.

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ICT Support and Trustworthiness Assessment

So far, this study discussed three topics: Franchising, ICT support, and Trustworthiness Assessment. This paragraph explains the relationship between ‘ICT Support’ and ‘Trustworthiness Assessment’ in a franchise system which shows many similarities with the study of Croonen & Broekhuizen (2017). However, in the literature is described that trustworthiness highly depends on the assessment of stakeholders. Consequently, stakeholders assess an organization’s trustworthiness by the way it fulfills its duties/tasks (Caldwell & Clapham 2003; Gullett et al. 2009; Hodson, 2004). It is argued that the same applies to a franchise system. Moreover, franchisees expect their franchisor to support them in such way that they are able to perform their primary activities (Grünhagen et al. 2008; Roh & Yoon, 2009 Grace et al.,2013). ICT support is seen as an important mechanism to support franchisees for several reasons. First of all, ICT support proves to be beneficial in franchising by improving communication, efficient/effective knowledge transfer, website hosting, transactional services, and customer relationship management tools. These advantages become extra important when the franchise network is geographically separated (Brooks, 2012; Grünhagen et al. 2008; Croonen & Broekhuizen, 2017). Secondly, the dataset contains information about franchisees that are highly dependent on the provided ICT services. Moreover, their website allows franchisees to contact their customers and basically functions as their business card. Their concept fits into the so-called ‘Gig economy3_{’. In summary, it is expected that the received ICT} support from franchisors primarily affects franchisees’ perception towards his franchisor. Moreover, as both variables rely on the perceptions of the franchisee it is logical that when a franchisee is satisfied with the ICT support, this automatically means he probably also trusts the organization to a more considerable extent. Therefore, we expect that if a franchisee is satisfied with the support received from ICT, it also enhances his trustworthiness in the organization. This brings us to the first hypothesis:

H1: The perceived ICT support positively influences the trustworthiness assessment of the franchisee about the franchisor.

3_{Gig economy: “The collection of markets that match providers to consumers on a gig (or job) basis in support of}

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Moderating variables

This study includes three personal characteristics to account for the heterogeneity within a franchise system. The first variable is, desire for autonomy which refers to a person’s desire for an independent spirit and freedom of action (Hornsby, Naffziger, Kuratko & Montagno, 1993; Croonen et al. 2016). Franchisees may have a stronger desire for autonomy because franchisors sell their business concept as of ‘being your own boss’ (Dada & Watson 2013; Dant & Gundlach, 1999). One could argue that it might be logical that every franchisee has a high desire for autonomy since they desire freedom and being independent. However, there are still differences in the desire for autonomy within a franchise system (Cochet et al. 2008; Dant & Gundlach, 1999). In the case a franchisee has a high desire for autonomy, it is found that they rely more on their own skills and efforts (Davies et al. 2011). If franchisees rely more on their own skills and efforts, it may also result in a more critical perception towards the provided ICT support. One could also argue that the critical perception affects franchisees’ trustworthiness assessment concerning the franchisor. The study of Davies et al. (2011) supports this reasoning by explaining that franchisees with lower levels of trust in their franchisor are more likely to rely on their own skills and efforts and thus, have a higher desire for autonomy. Consequently, it is proposed that franchisees with a high desire for autonomy are more critical about the provided support and have a lower trust level in their franchisor. In line with these arguments, it is expected that a high desire for autonomy affects the relationship between ICT support and their trustworthiness assessment. Hypotheses H2a is developed to verify our reasoning: H2a: Desire for autonomy weakens the positive relationship between ICT support and their trustworthiness assessment

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have a lower critical perception towards the provided ICT support. In contrast, it is expected that if a franchisee has a lower propensity to trust, it probably also results in a less satisfied franchisee about the perceived ICT support. Consequently, it also leads to a lower trustworthiness assessment in their franchisor. Therefore, it is expected that propensity to trust affects the relationship between ICT support and trustworthiness assessment. To verify our reasoning, the following hypothesis is developed:

H2b: Propensity to trust strengthens the positive relationship between ICT support and their trustworthiness assessment

The third variable represents industry experience that refers to the extent to which the franchisees had previous experience in a similar business (Jambulingam & Nevin, 1999). It is found by Olm et al. (1988) that: “franchisees who have prior experience, based on their past experience, would know what they are getting into, what it takes to be successful in a franchise system, and whether their expectations would be met by the franchise system”. One could argue that franchisees, with more experience, gained more knowledge about the industry. As a result of the acquired knowledge, it is also expected that they are automatically more critical about the provided support. This reasoning shows similarities with the article of Croonen & Broekhuizen (2017) in which it is found that higher educated franchisees are more critical and have a better belief in their capabilities (Croonen & Brand, 2013). The results revealed that for franchisees with a higher educational background, the relationship between ICT support and trustworthiness becomes negative rather than positive. In contrast, franchisees with a lower educational background positively influence the relationship between ICT support and trustworthiness. In summary, one could argue that higher educated franchisees and franchisees with a lot of industry experience gained more knowledge. As a result of the acquired knowledge, it is expected that franchisees become more critical about the perceived support. This brings us to hypothesis H2c to verify our reasoning and strengthen the finding of Croonen & Broekhuizen (2017):

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Figure 2: Conceptual model

Methodology

This paper builds on the article of Croonen & Broekhuizen (2017) by using their dataset and more importantly, deepening their findings. This study extends this article by including different moderators that reflect personal characteristics of the franchisees. The dataset reflects information about a Dutch Franchise organization. Hereafter, the data collection, measurement, analysis, and results will be discussed. Finally, this study ends with the conclusion & discussion.

Data collection

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Broekhuizen (2017) explains that the high percentage is a result from the importance that the franchise organization gave to their data collection, presentations at regional franchisee meetings, the incentive and finally, the reminders to nonrespondents. This study builds on the same dataset as the study of Croonen & Broekhuizen (2017). Croonen & Broekhuizen (2017) identified no significant-demographic differences, and therefore, the nonresponse bias was unlikely to be a problem.

Measurement

The existing literature is consulted to find suitable measures for the variables. Hereafter, each measure is shortly explained, including control variables.

ICT Support

The statements of Croonen & Broekhuizen (2017) are used to identify perceived ICT support. This approach shows similarities towards the approach of Cladwell & Clapham (2003) in which they also identify an organizations duty fulfillment based on similar statements. The statements capture franchisees perceived ICT support based on a five-point scale (1=strongly disagree, 5=strongly agree). Appendix 1 provides an overview of the ICT support statements.

Trustworthiness

Trustworthiness is identified through the 15 items from the study of Searle, Den Hartog, Weibel, Gillespie, Six, Hatzakis, and Skinner (2011). These 15 items include the ability, benevolence, and integrity dimensions from Mayer et al., (1995). These dimensions are commonly suggested by the literature when trustors assess trustees’ intentions and behaviors in organizational settings (e.g., Gefen, Karahanna & Straub, 2003; McKnight, Ghoudhury & Kacmar, 2002; Gefen, 2000; Dirks & Ferrin, 2002). Moreover, it is found in the literature that stakeholders assess an organization’s trustworthiness by the way it fulfills its duties/tasks (Caldwell & Clapham 2003; Gullett et al. 2009; Hodson, 2004). The 15 statements are identified through a five-point scale (1= strongly disagree, 5=strongly agree). Appendix 1 provides an overview of the Trustworthiness statements.

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entrepreneurial context (e.g., Benzing & Chu, 2009; Zimmerman & Chu, 2013). Secondly, propensity to trust is measured through the eight statements that are developed by Mayer and Davis (1999). Finally, industry experience is measured by simply asking how many years a franchisee works in the current sector. This question is based on the study of Jambulingam and Nevin (1999). Desire for Autonomy and Propensity to trust are answered with the use of a five-point scale (1= strongly disagree, 5=strongly agree). Appendix 1 provides an overview of the questions.

Control variables

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Analysis and Results

To test the hypothesis in this study a hierarchical regression analysis is conducted. Before conducting the regression analysis, it is necessary to identify the relevant items of each construct and divide them by the number of items to obtain the composite scale for each variable. Therefore, the first step in the analysis was to conduct a factor analysis on multi-item scales and retain measures for each construct according to the following criteria: (1) each item must have a loading of greater than 0,5; (2) each item must not have a loading of greater than 0.4 to more than 1 factor; (3) each item must load into the correct factor (Song, van der Bij & Song, 2011). Several questions had to be dropped out of the analysis as a result of these restrictions. The following questions are deleted: questions; 11 to 15 at trustworthiness, question 4 to 8 at propensity to trust, question 4 at subjective performance and finally questions 4 and 5 at the desire for autonomy construct. Eventually, this resulted in a reaming 25 items to measure these five variables. Table 1 provides an overview of the final factor loadings and table 2 the descriptive statistics.

Table 1: Factor Analysis

ICT Support Trustworthiness Assessment Propensity to trust Desire for Autonomy Subjective Performance ICT1 0,927 -0,081 0,074 -0,106 0,053 ICT2 0,898 0,075 -0,005 -0,017 0,077 TWA1 0,177 0,741 -0,060 0,103 -0,213 TWA2 0,083 0,798 0,056 -0,078 0,083 TWA3 0,094 0,802 -0,050 -0,025 -0,015 TWA4 -0,057 0,851 -0,069 -0,175 0,213 TWA5 -0,067 0,893 -0,025 -0,061 -0,004 TWA6 -0,101 0,963 -0,050 0,005 0,089 TWA7 -0,006 0,833 0,049 0,003 0,102 TWA8 -0,080 0,854 0,105 0,100 0,053 TWA9 0,022 0,843 0,129 0,164 -0,110 TWA10 -0,072 0,921 0,041 -0,024 -0,032 PTT1 -0,076 0,081 0,774 -0,116 -0,022 PTT2 0,010 0,266 0,659 -0,102 -0,127 PPT3 0,172 -0,202 0,741 0,191 0,021 DFA1 -0,046 0,020 0,017 0,816 0,101 DFA2 -0,054 0,091 -0,143 0,859 -0,095 DFA3 -0,037 -0,083 0,103 0,796 0,080 SP1 0,000 -0,008 0,105 0,223 0,719 SP2 0,054 0,073 -0,052 -0,043 0,897 SP3 0,066 0,030 -0,091 -0,009 0,903

Extraction Method: Principal Component Analysis. Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 6 iterations.

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The questionnaire can be found in Appendix 1, which also includes the Cronbach alphas. The results reveal that all multiple-item constructs have good reliabilities with a Cronbach alfa between 0.67 and 0.95.

Table 2: Descriptive Statistics

As earlier mentioned, a hierarchical regression analysis is applied to test the hypothesis. As recommended by Aiken, West, and Reno (1991), all variables have been mean-centered to test the interaction effects. Hereafter, a multicollinearity test was conducted from Besley, Kuh, and Welsch’s (1980) to verify possible multicollinearity problems. The test indicates that the composite scales show no serious multicollinearity problems, and thus, the results fall within the restrictions (>1 and <10).

Table 3 reveals the results of the hierarchical regression analysis. The analysis exists of five different models that will be discussed in a chronical order starting with model 1. Model 1 includes the two control variables with an R-square of 0.08 and a significant (p<0.01) F-statistic (4.82). Model 2 includes the control variables of model 1 plus: ICT support, Desire for Autonomy, Propensity to Trust, and Industry Experience. The R-square of model 2 is 0.21 and a significant (p<0.01) F-statistic (4.11). Hereafter, model 3 starts with all variables of model 2, including the first interaction effect, Desire for Autonomy. Model 3 shows a significant F-value

Mean (standard Deviation) 1 2 3 4 5 6 7 1. ICT Support 2,81 1 (0,88)1 2. Trustworthiness Assessment 0,47 ,282** ₁ (0,14)1

3. Desire for Autonomy 4,44 -0,051 -0,005 1

(0,55)1 4. Propensity to Trust 3,03 ,241*_,277**_-0,031 ₁ (0,62)1 5. Industry Experience 10,99 0,013 -0,064 0,002 -0,116 1 (10,38)1 6. Subjective Performance 3,65 ,220* _,196* _{0,152 -0,044 -0,094} ₁ (0,89)1 7. Relationship duration 2,46 -0,018 -0,172 0,035 -0,125 -0,190 0,158 1 (1,15)1

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and an R-square of 0.22. Model 4 includes all variables of model 3 with the second interaction effect, Propensity to Trust. From Table 3, one could see that model 4 has a significant (p<0.01) F-value (3.27) with an R-square of 0.22. Finally, model 5 again includes all variables from model 4 with the last interaction effect of Industry Experience. From model 5, one could see a significant (p<0.01) F-statistic (2.92) and an R-square of 0.22.§

Table 3: Hierarchical Regression analysis

Model 1 Model 2 Model 3 Model 4 Model 5

Coefficient Estimate Coefficient Estimate Coefficient Estimate Coefficient Estimate Coefficient Estimate (Standard Error) (Standard Error) (Standard Error) (Standard Error) (Standard Error) Intercept 2.58*** 2.66*** 2.67*** 2.68*** 2.69*** (0.40) (0.41) (0.41) (0.41) (0.41) ICT Support 0.17* 0.15* 0.15* 0.16* (0.09) (0.09) (0.09) (0.09)

Desire for Autonomy -0.02 0.01 0.01 0.02

(0.08) (0.09) (0.09) (0.09)

Propensity to Trust 0.23** 0.24** 0.24** 0.25***

(0.09) (0.09) (0.09) (0.09)

Industry Experience -0.06 -0.04 -0.05 -0.05

(0.08) (0.09) (0.09) (0.09)

ICT Support * Desire for

Autonomy 0.10 0.11 0.11

(0.09) (0.09) (0.09)

ICT Support * Propensity to

Trust -0.05 -0.05

(0.08) (0.09)

ICT Support * Industry

Experience 0.06 (0,11) Relationship Duration -0.17** -0.15* -0.14* -0.15* -0.15* (0.08) (0,07) (0,07) (0,07) (0,08) Subjective Performance 0.27** 0.23** 0.23** 0.23** 0.23** (0.11) (0.10) (0.10) (0.10) (0.10) F-Value 4.82** 4.11*** 3.72*** 3.27*** 2.92*** R² 0.08 0.21 0.22 0.22 0,22

Dependent Variable: Trustworthiness Assessment

* Significant at p <0.10 (2-tail test); ** Significant at P <0.05 (2-tail test); *** significant at p <0.01 (2-tail test).

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propensity to trust is positively influencing a franchisees trustworthiness assessment in their franchisor with significant (p<0.05) results in model 2, 3, 4, and 5. Thirdly, both control variables show significant P<0.05) results in all models in which relationship duration negatively influences a franchisees’ trustworthiness assessment. In contrast, subjective performance positively influences a franchisee’s trustworthiness assessment.

An incremental F-test is conducted to examine differences between the different models (Cramer, 1972). The test reveals that model 3 is a significant (p<0.01) improvement over model 2. In line with these results, model 5 proves to be a significant improvement over model 4. However, no significant (p<0.05) evidence has been found for the moderating effect of desire for autonomy, propensity to trust, and industry experience. Thus, hypothesis H2a, H2b, and H2c are rejected. In summary, one can conclude that our sample provides sufficient evidence to conclude that our model is significant, but not enough to conclude that our moderation effects are also significant.

Conclusion & Discussion

ICT support and Trustworthiness

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Eventually, this results in a different mixture of variables and probably influences the outcomes. As a result of this contrasting finding, this study strongly advices future research to study this relationship in another franchise organization. Future research should also verify the argument of Croonen & Broekhuizen (2017) by including some additional variables that measure this possible “dual role” ICT may play. By doing so, future research can control for possible differences in the outcome. Secondly, it is argued that ICT support proves to be an interesting duty that should be fulfilled with serious care by the franchisor. This argument is partially confirmed by our findings in the correlation matrix (table 1) and as a result of our marginally significant relationship. Another reason is the importance of ICT in both, the business environment, and the academic world (Gartner, 2019; Forbes, 2018; Boulay, 2012; Brooks, 2012; Ramaseshan et al., 2018; Paswan & Wittman, 2009). Furthermore, is shown that ICT support is significantly related towards the trustworthiness assessment. As a result of our finding, future research should study this ICT variable more extensively. Right now, ICT support is measured through two questions, which is seen as a major limitation of this study. Consequently, it is not possible to provide a detailed description how franchisees perceive ICT support and explain, for instance, the differences between franchisees who perceived ICT support as high compared to franchisees that had a lower perception of ICT support. Therefore, future research could incorporate the framework of Aral and Weill (2007) to identify the perceived ICT support. Aral and Weill (2007) developed a framework that is based on the resource-based view. Their framework not only increases the overall reliability in capturing the perceived ICT support but also provides guidance and more detail in capturing the perceived ICT support. Moreover, their framework distinguishes several levels in ICT (infrastructure, informational, transactional, and strategic). By using this framework, it is possible to explain differences in the outcomes and analyze the perceived support on different levels.

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explanation could be that franchisees are happy about the perceived ICT support and consequently, not critical about this supporting role. This is partially confirmed in the results as there is a marginally significant (p<0.10) positive relationship between the perceived ICT support and Trustworthiness assessment. To strengthen this argument, an additional analysis is conducted that can be found in Appendix 2.1. The results indicate that the franchisees are indeed more positive (strongly agree, agree, neutral) than negative about the perceived support. One could argue that there is not enough variation among the sample as a result of this finding. Consequently, franchisees are more satisfied with this duty fulfillment of the franchisor and thus, a lower critical perception. Another argument could be that this finding is a result of the franchisees in the sample. Moreover, it is expected that the franchisees are not busy with optimizing the ICT support since their expertise lies in executing home-services to customer homes.

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Control variables

To control the possible effects of other variables on the dependent variable, this study included two variables; ‘relationship duration’ and ‘subjective performance’. Both variables prove to be significantly (p<0.05) related to franchisees trustworthiness assessment. First of all, relationship duration shows to be negatively related to the franchisees’ trustworthiness assessment in the franchisor. This result confirms the expectation concerning the argument that franchisees become more critical and gain more knowledge when they spent more time in the franchise organization. This finding contributes to and is strengthened by, the results of Blut et al. (2011) in which they also found that franchisees become more critical as a result of the age of the relationship. Thus, one could conclude that the perception of a franchisee to judge about their franchisor becomes better when the relationship gets older. In contrast, subjective performance positively influences the trustworthiness assessment and thus, confirms the expectations. This implies that franchisees that perceive to be successful are more satisfied with their performance. Consequently, this should lead towards a happier franchisee and a positive perception which is argued to result in a higher trustworthiness assessment in the organization. The additional analysis in appendix 2.3 confirms that indeed, the franchisees in this sample are satisfied with their performance. Thus, there is a limited variation in the sample. Again, perceptions and also personal characteristics are essential in this study. Both control variables are significant in this study, but there are some important implications for future research. First of all, future research should incorporate control variables that reflect ICT. Think for instance of, the influence of system integration or the number of complaints about ICT. Future research should incorporate more control variables, and variables that are better related to ICT.

Overall conclusion.

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Appendix 1 - Questionnaire

An overview is presented of the questionnaire used in this study. Table 2 presents the questions, including the construct (∝) reliabilities of each variable. The following abbreviations are used in the table: IV = independent variable, DV = dependent variable, M= moderating variable and, C = control variable.

Table 4: Questionnaire

ICT = ICT support (IV) Scale variable 1 = strongly disagree – 5 = strongly agree | ∝ 0.83 1. The franchise system uses high-quality ICT systems

2. ICT-related system problems are effectively Resolved

TWA = Trustworthiness Assessment (DV) Scale variable | 1 = strongly disagree – 5 = strongly agree | ∝ 0.95 1. The franchisor has the characteristics that enable it to fulfill its tasks. 2.The franchisor is capable of meeting its responsibilities.

3. The franchisor is known to be successful at what it tries to do. 4. The franchisor does things competently

5. The franchisor has genuine care for the franchisees.

6. The interests of the franchisees are taken into account in this franchise system. 7. The franchisor is concerned about the welfare of its franchisees.

8. This franchise system is guided by sound moral principles and codes of conduct. 9. Power is not abused in this franchise system.

10. This franchise system does not exploit external stakeholder

11. Within this franchise system there is a concern for the well-being of stakeholders. 12. The franchisor will go out of its way to help its franchisees.

13. The franchisor would never deliberately take advantage of its franchisees. 14. The franchisor is concered about the needs and wishes of his franchisees 15. The franchisor has everything it needs to function effectively.

DFA = Desire for autonomy (M) Scale variable | 1 = strongly disagree – 5 = strongly agree | ∝ 0.67

1. Within the franchise system there is enough space for keeping my freedom. 2. Within the franhcise system there is enough space for making your own decisions. 3. Within the franhcise system there is enough space to organize my time myself. 4. Within the franchise system I do not have the feeling of working under a boss. 5. Within the franchise system I'm able to determine my own future

PTT = Propensity to trust (M) Scale variable | 1 = strongly disagree – 5 = strongly agree | ∝ 0.78 1. Most people do what they promise

2. Most people fill in opinion polls fairly.

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4. You have to be very careful with people you don't know 5. Most experts tell it honestly if they don't know something

6. These days you have to be alert, otherwise people will abuse you 7. Most professionals won't charge extra if they get the chance

8. Most adults are suitable for the position they fulfill in their organization SP = Subjective performance (C)

Scale variable | 1 = strongly disagree – 5 = strongly agree | ∝ 0.84 1. In general I perceive my firm as succesfull

2. I'm satisfied about my turnover and profit developments 3. During the last period I achieved my financial goals 4. I performed better than other collegeaus in this sector

Industry Experience (M) 1. What is the number of years experience in the sector?

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Appendix 2 – additional analysis

Appendix 2.1 – ICT support

From table 3 one could conclude that there are more positive perceptions (strongly agree, agree and neutral) about the perceived ICT support than negative (strongly disagree, disagree).

Table 5: an overview of the answers concerning ICT support.

ICT support

Question: Q1 Q2

strongly disagree 8,7 12,6 disagree 28,2 16,5 neutral 42,7 46,6 agree 17,5 23,3 strongly agree 2,9 1,0 Total 100,0 100,0

Appendix 2.2 – Propensity to Trust

From table 4 one could conclude that there are more positive perceptions (strongly agree, agree and neutral) about the propensity to trust than negative (totally disagree, disagree). Table 6: an overview of the answers concerning propensity to trust.

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Appendix 2.3 – Subjective performance

From table 5 one could conclude that there are more positive perceptions (strongly agree, agree and neutral) about the subjective performance than negative (totally disagree, disagree).

ICT Support and Trustworthiness Assessment in Franchise Systems: the moderating role of Franchisees’ Personal Characteristics