CREATING TRUST THROUGH
FRANCHISEE ADVISORY COUNCILS
By
Jordi Fijnenberg
University of Groningen
Faculty of Economics and Business
Postbus 800, 9700 AV Groningen
Msc BA Master Thesis
Strategy & Innovation
4 October 2009
Supervisor
Dr. E.P.M. Croonen
Prof. dr. mr. E.M. Kneppers-Heijnert
Jordi.fijnenberg@student.rug.nl
Abstract
This study is about the organization of a credible franchisee advisory council (FAC). According to Croonen (2006), a high level of strategic participation positively influences the trust of the franchisees. This participation of franchisees can be found for example through franchisee advisory councils. Croonen (2006) notes that the participation through franchisee advisory councils only works proper when they are organized clearly and fairly. Based on my research, it can be concluded that the organization of a credible FAC must lead to bilateral involvement, credible representation of members and to transparency of the processes and activities of the FAC. This bilateral involvement can be achieved through procedures regarding the funding, rights and meetings of the FAC. To assure a credible representation of the FACs members procedures regarding selection, replacement, additional functions and 3rd parties are considered as important. Transparency of the FAC can be achieved
through communication procedures.
Keywords: FAC, Franchisee advisory Council, Franchisor, Franchisees, Trust,
Content Page
1. INTRODUCTION 4
1.1 Problem definition 6
1.2 Boundaries and Limitations 8
1.3 Thesis Outline 9
2. LITERATURE REVIEW 10
2.1 Franchisee Advisory Councils 10
2.2 Characteristics of FACs 14
2.2.1 Procedures regarding the funding and creation 15
2.2.2 Procedures regarding the rights 16
2.2.3 Procedures for selecting members 19
2.2.4 Procedures regarding the replacements 21
2.2.5 Procedures regarding the meetings 22
2.3 Initial Conceptual Model 25
3. METHODOLOGY 27 3.1 Research Method 27 3.2 Data Collection 27 3.2.1 Expert Interviews 28 3.2.2 Case study 29 3.3 Validity 31 3.4 Structure of Interviews 32 3.5 Data Analysis 34
4. RESULTS EXPERT INTERVIEWS 35
4.1 Characteristics FAC 35
4.2 Procedures regarding the funding and creation 37
4.3 Procedures regarding the rights 39
4.4 Procedures for selecting members 41
4.5 Procedures regarding the replacements 43
4.6 Procedures regarding the meetings 45
4.7 Measures for system-wide focus 47
4.8 Revised Conceptual Model 49
5. CASE STUDIES 51
5.1 DA Drugstores 51
5.2 Albert Heijn 52
5.3 Main differences satisfied/unsatisfied 53
5.4 Procedures regarding the funding and creation 55
5.5 Procedures regarding the rights 57
5.6 Procedures regarding the selection 60
5.7 Procedures regarding the replacements 63
5.8 Procedures regarding the meetings 64
5.9 Measures for system-wide focus 67
5.10 Remaining issues 70
5.11 Further revised conceptual model 71
6. CONCUSION AND DISCUSSION 73
6.1
Conclusion 736.2 Discussion 81
REFERENCES APPENDIX
Appendix I List of definitions conceptual models Appendix II Interview scheme Experts
1. INTRODUCTION
In recent years, the popularity of franchising has increased enormously. The number of franchise establishments in the Netherlands tripled over the past 15 years (FranchisePlus, 2009). The number of franchisees in the retail food and non-food business increased with respectively 13 percent and 24 percent in comparison to the year 2004 (Rabobank, 2009). For the business services and the catering industry the growth is significant higher with 72 percent and 67 percent (Rabobank, 2009). Franchising appears relatively often in retail branches like DIY (Do It Yourself businesses), supermarkets, petshops, bodyfashionshops, video shops, telecom businesses and bike shops (HBD, 2009). Nowadays franchising is also growing in business services like mortgage agencies, employment agencies and education offices (FranchisePlus, 2009). The “Hoofdbedrijfschap Detailhandel” (2009) says that in the year 2006 5.6 percent of all the selling points in the Netherlands had a franchise agreement with a franchisor.
Caves and Murphy (1976) define a franchise agreement as “one lasting for a definite or indefinite period of time in which the owner of a protected trademark grants to another person or firm, for some consideration, the right to operate under this trademark for the purpose of producing or distributing a product or service”. Whereas in the past product-distribution and trade-mark franchising, the so called “first generation” forms of franchising, were more important, nowadays the so called “second generation” of franchising is more important; business-format franchising (Kneppers-Heijnert, 1988; Price, 1997). Falbe and Welsh (1998) define business-format franchising, based on the definition of the Department of Commerce, as following; "Business-format franchising is characterized by an ongoing business relationship between franchisor and franchisee that includes not only the product, service and trademark, but the entire business format itself, a marketing strategy and plan, operating manual and standards, quality control, and continuing two-way communications".
Although the replication strategy proofs to be an interesting theory for the franchisor to create and operate a large number of similar outlets, the role of the franchisees in this process of replication is not discussed in this article (Winter and Szulanski, 2001). A number of recent cases in the franchise business in the Netherlands show that the role of these franchisees is important.
Different franchisees in the Netherlands recently gave up their trust in their franchisor. Examples are the franchisees of Bakker Bart, New Port Blue and Oil & Vinegar. Also the franchisees of DA Drugstores had problems with their franchisor. While the customers of DA several times awarded the drugstores as the best drugstores of the Netherlands, the franchisees were not satisfied with their franchisor (Franchise Formules, 2008). They had to pay a high fee which was, according to the entrepreneurs, much too high compared to the service the franchisor delivered. Also the forced purchasing of products led to unsatisfied entrepreneurs; they ended up with a lot of products they could not sell. This dissatisfaction of the entrepreneurs led to entrepreneurs that stopped with the business format and also to bad publicity for the franchisor (Franchise Formules, 2008). While the franchisor was trying to replicate or change the business format on a large scale, the role of the franchisees in these processes was ignored. The following authors show that the role of franchisees, especially during strategic changes in the business format, is important.
Different authors (Bachmann, 2001; Krishnan et al., 2006; Luo, 2005) say that trust and fairness are important factors in a relationship. Trust and fairness are especially important during drastic changes in the context of a relationship. This also counts for the relationship between the franchisees and their franchisor (Croonen, 2006). Especially in situations where outcomes are uncertain, a certain degree of trust between partners is needed (Croonen, 2006). Bradach (1997) says that franchisors have to persuade the franchisees to implement system wide changes.
also to be an important instrument (Croonen, 2006). Strategic participation relates to the degree of involvement of franchisees in strategic decision-making process of the business format. According to Dandridge and Falbe (1994) strategic participation can lead to a competitive advantage due to the cooperation, communication, trust and exchange of ideas between the franchisee and franchisor.
According to Croonen (2006), a high level of strategic participation positively influences the trust of the franchisees: especially when a franchise system is highly standardized or does not have company-owned units, or a small share of them. This participation of franchisees can be found for example through franchisee advisory councils (Croonen & Brand, 2006). Cochet (2008) says that; “In chains where the franchisor makes important decisions and hence his ongoing performance is required, franchisees should be concerned about misbehaviors and are expected to adopt, possibly in collaboration with the chain’s management, a franchisee council”.
According to Dandridge and Fable (1994), franchise councils can be defined as: “An elected or selected group of franchisees who meet with representatives of the franchise headquarters to discuss and provide advice on issues of importance to all franchisees” (Dandridge and Falbe, 1994). Franchisee advisory councils look after the interests of the franchisees. They act when there are conflicts between the franchisor and franchisee, they look after the continuity of the business format and can come up with trends they spotted in the field. They also can improve the communication between the franchisee and the franchisor and also bilateral between the franchisees (Leunissen, 1998).
1.1 Problem definition
Case studies from Croonen (2006) showed that franchisees who were involved in the franchisee advisory council stood close to the management. They possessed more information about why certain decisions were made. As a consequence, they had a higher degree of trust. The studies showed that when the franchisor and the franchisees were in close contact, the franchisor could more easily convince the franchisees of the need for certain (strategic) decisions (Croonen, 2006).
organized, so this can contribute to the trust of franchisees in their franchisor?” To give an answer to this main research question, different sub questions are made. The relevance of the following sub questions is shortly described and also the way the questions are answered is given. The following questions are made:
1. What is a franchisee advisory council (FAC)?
Because the franchisee advisory council (FAC) is the main subject of this thesis, it is important to give a clear definition of what a FAC is. In this part the functions of the FAC are described based on the findings in the literature. To position the FAC against other participation mechanisms, the functions of the FAC are being compared to the functions of an independent franchisee association and the functions of Works Councils in organizations in general in the first part of the research. This positioning must lead to a clear definition of FACs and to differences and similarities between other participation mechanisms. In paragraph 2.1 this question is answered.
2. What are the characteristics and procedures of a credibly organized franchisee advisory council according to the franchise and economical literature?
By answering this question, there is given an insight in which characteristics and procedures of a FAC influence the trust of franchisees in their franchisors. The answer to this question is based on the findings in the franchise and economical literature. Because there is relatively little scientific literature written about these characteristics and procedures of FACS, also sources from professional franchise literature are used. Paragraph 2.2 and further describes the main outcomes from this literature.
3. What are the characteristics of a credibly organized franchisee advisory council through the eyes of experts in the field?
Because the answer to the main question of this research gives a contribution to the trust of franchisees in their franchisor, it is very important to know which characteristics and produces are important through the eyes of the franchisees in organizing a credible FAC. To answer this question, the revised conceptual model made in chapter 4 is presented to different franchisees of DA Drugstores and Albert Heijn. Outcome of the presentation of the revised conceptual model to the franchisees leads to a further revised conceptual model of characteristics and procedures of FACs that lead to a credibly organized FAC. This further revised conceptual model may be tested in future research.
1.2 Boundaries and Limitations
This part describes the boundaries of this thesis. Also the limitations that are perceived during this research are described. The boundaries and the limitations of this research are:
Only an answer is given to how franchisee advisory councils should be credibly organized through the eyes of the franchisees. No other instruments to create and maintain trust between the franchisor and franchisees, such as company-owned units and calculation of fees, are being researched. Paragraph 2.1 shortly looks at other kinds of strategic participation through Working Councils and independent franchisee associations. When no sufficient information about certain subjects of FACs was found in the literature, I looked at how the procedures of Works Councils are designed. When looking at the procedures of Works Councils, I have mainly looked at the arrangements of the Dutch Law of Works Councils, the so called Works Council Act. This Works Council Act gives a good insight in the organization of a credible participation mechanism.
Relatively little scientific franchise and economical literature is written about the characteristics and procedures of FACs. Because of this small amount, the literature part of this research also depends on sources from professional franchise and economical literature. It should be noted that those kind of sources could be normative while they are not always are grounded by systematic research. That is why the findings from the literature are presented and verified through experts and franchisees.Chapter 1: Introduction Chapter 2: Literature Review Chapter 4: Expert Interviews Chapter 5: Case Studies Outcome: Initial Model Outcome: Revised Model Chapter 3: Methodology Chapter 6: Conclusion 1.3 Thesis Outline
Figure 1 shows the structure of the thesis and the steps that are taken to give an answer to the main question of this research. Chapter 2 gives an answer to how the scientific and professional franchise and economical literature sees FACs and which procedures contribute to a credible FAC according to this literature. Outcome of this chapter is an initial conceptual model based on the outcomes of the literature review. Chapter 3 describes which methodology is used to revise the initial model as presented in chapter 2. Chapter 4 gives an answer to how experts see how FACs should be credibly organized. Outcome of this chapter is a revised conceptual model. This revised conceptual model is tested on case studies in chapter 5. In this case studies different franchisees of DA Drugstores and the Albert Heijn are being interviewed. This chapter ends in a further revised conceptual mode. Chapter 6 gives the main conclusion of this thesis and an answer to the main research question. This chapter also provides a discussion and recommendations for further research. In the appendix the interview schemes can be found.
Fig. 1 Structure of thesis
Outcome:
2. LITERATURE REVIEW
As pointed out in Chapter 1, this study considers the organization of a credible franchisee advisory council to contribute to the trust of the franchisees in their franchisor. To give an answer to which characteristics and procedures of a credible organized FAC are important, it is important to know how the literature sees those characteristics and procedures. In the scientific literature little is written about the organization of a credible franchisee advisory council. Because of this shortcoming in the scientific literature, also professional literature is used to answer the question of the main characteristics and procedures of a credible FAC.
Because the franchisee advisory council is the main subject of this thesis, it is important to first give a clear description of what a FAC is. Paragraph 2.1 gives a description of the functions of a FAC. Paragraph 2.2 gives the main characteristics and procedures of a FAC based on the literature. The subparagraphs following paragraph 2.2 describe those procedures more extensively. Paragraph 2.3 gives an initial model based on the procedures and characteristics described in the subparagraphs.
2.1 Franchisee Advisory Councils
As mentioned in the introduction (p4.), Fable and Welsch (1998) define business-format franchising as an ongoing business relationship between franchisor and franchisee that includes not only the product, service and trademark, but the entire business format itself. An important characteristic in their definition, based on the definition of business-format franchising of the Department of Commerce, is the continuing two-way communication in the relationship between franchisor and franchisee (Kostecka, 1986). According to Dandridge and Falbe (1994) strategic participation can lead to a competitive advantage due to the cooperation, communication, trust and exchange of ideas between the franchisee and franchisor. According to Andersson (2002) one of the best ways a franchisor can facilitate better communication with franchisees is to establish and support a strong, elected and independent-minded FAC. In the literature franchisee advisory councils are also referred to as franchisee councils, franchisee advisory boards, franchisee-franchisor advisory councils and FAC(s) (Cochet & Ehrmann, 2007). In this research, the main subject will be referred to as franchisee advisory councils or FACs.
representatives of the franchise headquarters to discuss and provide advice on issues of importance to all franchisees” (Dandridge and Falbe, 1994). A FAC can be an effective conduit for the expression of franchisee needs, questions, and concerns to the franchisor. A FAC can also negotiate difficult issues with the franchisor, work within the organization on issues and help introduce new ideas between corporate and the network (Andersson, 2002).
According to Cochet & Ehrmann (2007) it is more likely that a FAC will be appointed when there are more decision rights allocated to the franchisor. Moreover, they say that it is less likely to set up a FAC in chains with a high proportion of company-owned outlets than in chains with a low proportion of company ownership. The overall goal of a FAC is to facilitate communication between franchisor and franchisee and provide a platform for the sharing of ideas and implementation of ways to maximize profits for both parties (Dweyer, 2008). According to Lawrence & Kauffman (2009) FACs are, without the ability to challenge the franchisors’ authority, often viewed as an extension of the franchisor without a true independent identity or function. Cochet and Ehrmann (2007) say though that FACs have the ability to strengthen enforcement by collective punishment of deviant franchisors by at least a majority of franchisees. Councils also hand the opportunity for common interpretations of obligations and collecting conflict information that may occur in the channel, with this facilitating coordination of individual franchisees. As a result, offering sanctions and the transferring action of information to all individual franchisees are possible enforcements of the FAC (Cochet and Ehrmann, 2007).
Looking at the main characteristics of a FAC mentioned in the literature it can be said that; A FAC is an independent-minded mechanism to facilitate better communication between the franchisor and the franchisees where difficult issues can be negotiated, franchisees needs can be expressed and collective punishments can be enforced.
2.1.1 Franchise Association
franchisor and resolute strategic issues (Harris, 1992). While franchise associations are independent non-profit organizations, FACs are corporate funded and supported groups made up of appointed or approved franchisees (Lawrence & Kauffman, 2009). Lawrence and Kauffman (2009) say that the unique feature is that FACs’ existence and membership are under complete control of the franchisor while associations are complete independent.
2.1.2 Works Council
As mentioned before, not much literature is written about the organization of a credible FAC. To get more insights in how such a credible mechanism should be organized, I have looked at the organization of Work Councils. As mentioned in the problem definition, a high level of franchisee strategic participation positively influences a franchisee’s perception of franchise system trust (Croonen, 2006). Strategic participation can resist franchisor moral hazard and franchisee opportunistic behavior (Cochet, 2007). Works Councils can also participate in the process of strategic decision-making (Goodijk, 2000). Comparing strategic participation of FACs and the strategic participation of Works Councils, some similarities can be found in the literature.
According to Bakels (2007), participation of Works Councils aims for two goals. At first the interests of the employees are looked after by the Works Council. This must be seen as a bigger spread of power in the company or a more balanced look at the different interests (Bakels, 2007). Participation can lead to the improvement of the decision making and to a higher acceptance of the decisions of the policy makers and the management (Bakels, 2007). Besides these improvements, participation of employees can lead to better information services of the policy makers (Bakels, 2007).
Table 3.1 gives an overview of the main similarities and differences between the different forms of representation. FACs and Franchisee Association are quite different from each other. Associations are independent organizations and show more similarities with unions. FACs and Works Councils though, show some similarities. They both are established by the policy makers of the company, a FAC can also negotiate difficult issues with the franchisor, work within the organization on issues and help introduce new ideas between corporate and the network (Andersson, 2002). Besides that, they are both corporate funded and must be seen as consultation partners. The main difference between FACs and Works Councils is that Works Councils are obliged by the law and FACs not (art.2 WOR). Because there is very little scientific literature related to the procedures regarding the organization of FACs (Croonen, 2006; own research), the mechanism of Works Councils will be compared to FACs further in this literature review. Also the procedures of Works Councils will be taken in consideration. I will look if they possibly can be applied to a credibly organized franchisee advisory council.
Table 2.1 Characteristics different forms of representation
Franchisee advisory Franchise Association Works Council Council
Established by Franchisor Franchisees Employer
Funding Corporate funded Independent non-profit Corporate funded
Function Strategic (franchisee) Controlling function, Strategic (employee) participation, Resolution of strategic participation, Consultation partner issues Consultation partner
Goal Look after interest of Look after interest of Look after interest of franchisees franchisees employees
Members Franchisees Franchisees Employees
Enforcement Collective punishment Collective punishment Enforcements determined by law
Establishment Not obliged Not obliged Obliged by law at
obligation (Only when one wants companies with 50 quality mark of NFV employees or more (art. 2 communication should be WOR 1998)
2.2 Characteristics of FACs
In the Dutch Civil law it is ordered that Works Councils need to make regulations in which subjects are arranged that are subscribed through the “Wet op de Ondernemingsraden” (Works Councils Act) (art. 8 WOR). This regulation must include at least subjects like elections (art. 10 WOR), the procedures of the Works Council, the voting right during meetings and the facilities of the secretariat (art. 14 WOR). Before the regulation is submitted, the Works Council needs to give the employer the opportunity to give his notion over the composition of the regulation (Bakels, 2007).
According to Dweyer (2008), a franchisor should also make provisions for the formation of a FAC in the franchise agreement and draft the constitution and rules in its operations manual. By making these provisions, all franchisees will know that the objectives and working methods of the FAC have been conceived with the best intentions in mind (Dweyer, 2008). The first step in the organization of a FAC is the creation of by-laws by the franchisor and the franchisees. According to Dweyer (2008), the by-laws should cover: who belongs in the FAC and how the members are elected or appointed, to when and were meetings are held, and who pays the expenses. Menzer (1994) says that the by-laws should be open to change as the council moves forward.
Case studies of Croonen (2006) show that franchisees find the following procedures, and especially the fairness of the procedures, regarding the organization of the FAC important: “Procedures for selecting franchisees as members of the FAC (e.g. elections instead of FAC members being selected by the franchisor), procedures concerning the replacement of these members (e.g. that FAC membership is restricted to a maximum time period), and procedures regarding the rights of the FAC (e.g. is the FAC allowed to vote for or against certain decisions, or is it only allowed to give advice?)”. These procedures were considered important by the franchisees, because the franchisees saw the board of the FAC as an institution for representing their interest. Besides these procedures, Menzer (1994) also mentions the importance of the procedures regarding the number of times of meetings. Dweyer (2008) also adds the importance of procedures regarding the funding of the FAC. This is considered to be important, because the way in which the FAC is funded can lead to the feeling of being independent of the franchisor.
literature review are; procedures regarding the funding of the FAC, procedures regarding the rights of the FAC, procedures regarding the selecting the members of the FAC, procedures concerning the replacement of these members, and procedures regarding meetings of the FAC members. Based on the outcomes of this literature review, an initial conceptual model will be designed.
Table 2.2 Procedures of franchisee advisory council from literature Procedures influencing credible FAC Author(s)
1. Procedures regarding the funding of the FAC Dweyer (2008)
2. Procedures regarding the rights of the FAC Croonen (2006), Dweyer (2008) 3. Procedures regarding selection of FAC members Croonen (2006), Dweyer (2008) 4. Procedures regarding replacement of FAC members Croonen (2006), Dweyer (2008) 5. Procedures regarding meetings of the FAC Menzer (1994), Dweyer (2008)
2.2.1 Procedures regarding the funding and creation of the FAC
The Dutch “Law of Works Councils” describes different obligations for the employer to facilitate the Works Council (Bakels, 2007). First of all, the employer is obliged to place different facilities (like meeting rooms, coffee etcetera) to the disposal of the Works Council when they need to consult. The costs which are necessary for the fulfillment of the task of the Works Council and its committees (cost for the secretary) must be paid by the employer (art. 22 WOR). When the Works Councils decides to consult third parties, the employer is not obliged to pay these costs. These costs must be paid by the Works Councils themselves (Bakels, 2007). Dweyer (2008) also says that FACs needs procedures regarding the funding and creation of the FAC.
To reduce the feeling of the franchisees that the franchisor controls the FAC, a FAC must not only be funded jointly, but also be created jointly. If the FAC is not created jointly, franchisees may be reluctant and less accepting of an FAC created entirely by the franchisor (Dweyer, 2008). But it also works the other way around; A FAC created solely by franchisees may not involve the franchisor as much, and instead be more akin to an association (Dweyer, 2008). One possible solution is a hybrid version in which the FAC is co-funded by the franchisor and franchisee; the agenda is co-managed by both parties; and the working environment is grounded in mutual trust and mutual respect as well as in common interests and common sense (Bakulesh, 2000).
Based on the scientific and professional franchise and economical literature it can be concluded that a franchisee advisory council is no stronger than the support it receives from the franchisee community. To increase the credibility of a FAC, both parties should fund the FAC. This can lead to feelings that the FAC is confirmed by its members and that the results have been tested in a manner that represents not only the franchisor’s interest but also the franchisees’ interest. Besides that, there must be a feeling that the FAC is created jointly, and not only by the franchisor. This will bring the feeling that the franchisor does not control the FAC’s activities, but that the FAC is a bilateral mechanism. Based on this conclusion the following proposition are made, which can be found in table 2.2.1.
Table 2.2.1 Propositions for procedures regarding the funding and creation of the FAC Procedures regarding the funding of the FAC Expected influence on credibility
Jointly funding of FAC Positive
Jointly creation of FAC Positive
2.2.2 Procedures regarding the rights of the FAC
have to remain focused on common interest and goals, avoiding energy spent in issues that cannot be resolved in common interest. How the bargaining power is divided is not yet been definitively described.
Menzer (1994) says that the franchisor should not delegate actual authority. He argues that voting of the FAC should be nonbinding, which can imply that the FAC only is used as a sounding board. According to Windsperger (2003) franchisees may have decision rights, giving them decision making authority concerning specific tasks. Specific knowledge that a franchisee may have makes it interesting to divide decision rights. According to Perry (1993) do some FACs have decision making powers in key policies and programs, such as advertising and marketing. Others may recommend changes to be voted on by all franchisees. While many advisory councils have only the power to advise company executives, it is more effective to work out difficult issues together (Perry, 1993). Trust and ability to respectfully disagree are key factors to a successful partnership between brand and owner (Waldrop, 2008).
Based on these findings, it can be concluded that the rights of the FAC are not really determined by the literature. There are some advocates of decisions rights of the FAC, but there are also some opponents of an actual authority of an FAC. Looking at the rights of Works Councils, it can be seen that the Works Council Act subscribes that Works Councils have four kinds of rights:
The right of consultation: Consultation meetings shall deal with matters relating to the enterprise concerning which either the entrepreneur or the Works Council (art. 23-24 WOR). The consultation meeting is a meeting of the employer, represented by the manager and the Works Council. The employer gives notifications of advice related issues he has in the offing. The manager as well as the Works Council has the right to give proposals during the consultation meeting (Bakels, 2007). The right to advice: The employer has to win advice at the Works Council when decisions can have important financial, economical and/or organizational consequences for the firm. The employer has to seriously consider the advice of the Works Council. If his decision differs from the advice from the Works Council, the employer has to motivate by letter why his decision differs (art. 25 WOR).
has to have the consent of the Works Council before he can put his decision into action (art. 25 WOR).
The right of initiative: The Works Council can introduce their ideas about the firm, but the entrepreneur is not obliged to act upon these initiatives.Besides the rights the members of the Works Council have, the members have also some obligations they have to respect. They are restricted to make business secrets open in public; neither are they authorized to make information open in public that was given confidentially. This confidential information can be given by the employer, but also the Works Council can decide wether they keep information confidential or not (art. 20 WOR). Violation of the obligation of secrecy can be punishable. Also disciplinary sanctions are possible (Bakels, 2007).
Although procedures regarding the rights of the FAC are not really determined in the literature, one procedure regarding the rights was found. According to Grueneberg (2004) a way to increase the credibility of a FAC in the franchisee community is to provide assignments that are important to the system and its future. He gives different examples of assignments that FACs or committees of a FAC can execute: Supplier audits (let the franchisee advisory council design, monitor and report the results of the audit), system surveys (other franchisees may be more responding to the council than communicating directly to the franchisor), annual franchisee conference (give the council a budget and assign the duty of site selection) or job-applicants of franchisor management candidates (in some circumstances franchisee councils are so crucial to the system that franchisors want to make sure it will get along with a new executive) (Grueneberg, 2004). Grueneberg (2004) says that if the FAC is involved in these kinds of crucial projects, other franchisees may feel that the results are confirmed by its members. This can lead to a feeling that the results have been tested in a manner that represents not only the franchisor’s interest but also the franchisees’ interest.
The design though of these rights of the Works Council maybe applied, with some adjustments, to the rights of FACs. Empirical analysis has to show if these four rights of Works Councils can be adjusted and applied to the rights of FACs.
Table 2.2.2 Proposition for procedures regarding the rights of the FAC Procedures regarding the rights of the FAC Expected influence on credibility
The right of consultation Positive
The right to advice Positive
The right of endorsement Positive
The right of initiative Positive
Assigning important assignments for the system and its future Positive to the FAC
2.2.3 Procedures for selecting members FAC
Besides the procedures regarding the funding and the rights of the FAC, also procedures regarding the selection of the members are important (Croonen, 2006; Dweyer, 2008). In Works Councils it is arranged that the members are elected. The election takes place through elections with secret voting (art. 7 WOR). The members of the Works Council self will choose a chairman selected from the members of the council (art. 7 WOR).
1994). Dweyer (2008) says that the number of franchisees represented by each member should be limited to 50. Based on the franchise literature it can be concluded here that free elections are favored above the appointment of the franchisor. The literature though does not mention any mechanism how to motivate the franchisees to be a member of the FAC. Empirical analysis has to show what kind of measures can be put in place to motivate people to run for a FAC membership.
Another procedure that should be taken into consideration is the representation of the selected members of the FAC. Franchisee groups often takes on the characteristics of communities (Muniz and O’Guinn, 2001). According to Muniz and O’Guinn (2001) communities are based partly on “consciousness of kind” or an awareness and identification with other members of the group. According to Lawrence & Kauffman (2009) intergroup bias is a major component of the formation of communities; this relates to the tendency to evaluate an in-group in which one is a member over an out-group in which one is not a member. The elected members of the franchisee advisory council should therefore reflect all the franchisees. Perry (1993) says that a common franchisee council consists of five to eleven franchisee members who are usually successful and committed outlet-owners. These members must reflect the regional structure of the system. Also Dweyer (2008) says that there must be regions created for representation. There must be found a balance between adequate representations of all franchisee owners and there must be formed a group that is not so large that it will be unmanageable. Whereas Perry (1993) says that only successful outlet owners should be member, Dweyer (2008) says that also new franchisees should take place in the franchisee advisory council. According to Dweyer (2008) members of the FAC should; “include a mix of both new and experienced single-unit and multi-unit franchisees, and a regional mix of owners”. Franchisees should be democratic in selection representation. According to Menzer (1994) council members should reflect the geographic representation of the entire chain; therefore elections should be regionally balanced. Also a voting system should be considered where multi-unit owners do not dominate membership, so that small operators are also represented (Menzer, 1994).
Based on the literature, it can be concluded that an election of the members of a franchisee advisory councils is preferred above the appointment by the franchisor. The election of members will give the councils added credibility. Besides that, to overcome intergroup bias, the selected members should reflect all the franchisees. Members should reflect the regional structure of the system and should include a mix of experienced single-unit and multi-unit franchisees. Based on this conclusion, different propositions are made, which can be found in table 2.2.3.
Table 2.2.3 Propositions for procedures regarding selection of FAC members Procedures regarding selection of FAC members Expected influence on credibility
Freely election of members Positive
Appointed members by franchisor Negative Reflection of members based on regional structure of system Positive Reflection of both new single-unit and multi-unit franchisees Positive
2.2.4 Procedures regarding the replacements of the FAC members
In the case studies of Croonen (2006) procedures concerning the replacement of the FAC members were considered as important (e.g. the restricted membership to a maximum time period). At Works Councils, members are in principle chosen for a period of three years and are after that period immediately eligible for re-election. This law does not give an exclusion of the maximum number of sittings one can have in the Works Council (art. 6 WOR). To be chosen, one has to be working at the organization for at least one year. Members are entitled to vote when they are at least working six months at the organization (art. 6 WOR).
Another procedure regarding replacements of the FAC members that is mentioned in the literature is a procedure regarding the replacement of the president. According to Menzer (1994) when new elections have taken place, the past president should remain as adviser for one year past his term to help complete projects (Menzer, 1994). If a member is forced to leave his post, a mid-term election must be conducted to replace his post (Dweyer, 2008).
As mentioned before, not much scientific literature is written about the procedures regarding replacements of the FAC members. Based on the minimal literature regarding the procedures of the replacements of FAC members it can be concluded that representatives should be restricted to hold no more than two terms consecutively with a term period of no longer than three years. Based on this conclusion, different propositions are made, which can be found in table 2.2.4.
Table 2.2.4 Propositions for procedures regarding replacement of FAC members Procedures regarding replacement of FAC members Expected influence on credibility
An election period of up to three years with a one-third rotating Positive membership
Restriction of members to hold on no more than two terms Positive consecutively
2.2.5 Procedures regarding the meetings of the FAC
Besides the procedures described above, procedures regarding the meetings of the FAC can also be considered as important (Menzer, 1994). According to Cochet (2007) FAC meetings are held two-to-three times a year and can last a couple of days. Menzer (1994) says that FAC meetings should be held at least two to four times per year. Also Perry (1993) says that FAC members usually meet two-to-four times a year. One meeting must be held just before during the annual convention. This will allow franchisees to attend a FAC meeting and discuss their concerns in person with FAC members (Perry, 1993).
is not given the opportunity to be effective. In addition, the concerns of the FAC will not be addressed or resolved, and neither party benefits.
Besides the fact that issues of both parties should be equally represented, a plan must be developed to inform all franchisees of meeting actions. Formalized reporting will generate interest among franchisees and lead to wide involvement in the council and support from franchisees who are not council members. The report also affirms that the franchisor is following up on suggestions and taking action (Menzer, 1994). Although Menzer (1994) says that formalized reporting will generate interest among the franchisees, the importance of formalized reporting is a little under exposed in the professional literature about FACs. The literature about Works Councils really stresses the importance of procedures regarding the formalization of agendas and reports of the meetings (Bakels, 2007). He says that “special attention deserves the provision in art. 14 WOR. The regulations of Works Councils needs to indicate in what way the agenda and the reports of the meetings of the Works Council need to be announced. A similar obligation counts for the annual report of the Works Council. These regulatory requirements serve the goal to increase the involvement of the employees with the work of the Works Council”.
Another procedure that can help at organizing an effective FAC meeting is the introduction of committees (Menzer, 1994). By assigning specific responsibilities to committees it will be prevented that council meetings will get bogged down with tasks. Examples of committees include operations, services and marketing committees. Committees should review problems, determine a solution and make recommendations to the council (Menzer, 1994). Dweyer (2008) says that committees within an FAC are to contemplate several issues. Committees determine which issues are of importance and whether the item belongs on the agenda of the council.
with matters regarding a certain part of the organization, for example the canteen (art. 15 third paragraph WOR). The Works Council can also assign its power and rights towards this committee, with exception of the power to do lawsuits (art. 15 third paragraph WOR). The fourth paragraph of art. 15 WOR regulates the committees that prepare. Preparation committees are established for a short period of time. This committee can not practice any rights or powers of the Works Councils. Because the professional literature does elaborate much on the different kind of committees, it can be investigated in the empirical part of this research if such different kind of committees can be useful for a credible organized FAC.
Based on the literature about procedures regarding meetings of a FAC it can be concluded that meetings should be held two to four times a year, an agenda should be created on which issues of both parties are equally presented, there should be formalized reports of the meetings and committees can determine which issues are of importance and whether the item belongs on the agenda of the council. Based on these outcomes, the following propositions are made shown which are shown in table 2.2.5.
Table 2.2.5 Proposition for procedures regarding the meetings of the FAC Procedures regarding the meetings of the FAC Expected influence on credibility
Number of meetings per year Positive
Agenda equally presents issues of both parties Positive
Formalized reports of meetings Positive
Assignment of committees with specific responsibilities Positive
-
Standing committees with rights and power of council-
Committees for parts of enterprise with rights and power of council-
Committees that prepare matter with no right and power of council 2.3 Initial Conceptual ModelFigure 2 Initial Conceptual Model Credible Organized Franchisee Advisory Council
The independent variables of this research are procedures regarding the funding, procedures regarding the rights of the FAC, procedures regarding the selection of the members, procedures regarding the replacement of the members and procedures regarding the funding of the FAC. In paragraph 2.2.3 (p. 19) it is mentioned that Greuneberg (2004) says that “a franchisor can provide for elections of members of the council and put in place measures that will help the council to maintain to its focus on system-wide issues rather than individual grievances”. Which measures the franchisor can put in place are not mentioned in the article, neither does other articles give an answer to this question. To find out what kind of
Selection procedures
- Freely elected by franchisees (+) - Reflection of all franchisees (+)
- Appointment by franchisor (-) Between Trust
Franchisor And Franchisees Credible Organized Franchisee Advisory Council Replacement procedures
- Election period of up to three years (+)
- A one third rotating membership (+)
- No more than two terms consecutively (+) Right procedures - Right of consultation (+) - Right to advice (+) - Right of endorsement (+) - Right of initiative (+)
- Assign important assignments to the system and its future (+)
Meeting procedures
- Number of meetings per year (+) - Agenda equally presents issues both parties (+)
- Assigned committees (+)
- Formalized report of meetings (+)
Funding procedures - Jointly funding of FAC (+)
- Jointly creation of FAC (+)
measures the franchisor can provide, this procedure is also admitted to the initial conceptual model.
3. METHODOLOGY 3.1 Research Method
As mentioned in the introduction of this research (p. 8) little scientific research is done of how to design a credibly organized franchisee advisory council. The goal of this research is to get an insight into structures that will lead to a credible organized franchisee advisory council. Cooper and Schindler (2006) define studies where researchers search for loose structures to discover future research tasks as exploratory studies.
Exploratory studies go further than just describing the result; they try to explain the phenomenon of the research. According to Cooper and Schindler (2006) researchers use theories or propositions to discover and/or explain the motives behind a certain phenomenon. The goal of this research is to find the motives of franchisees behind their perceptions of a credibly organized franchisee advisory council based on different theories. Because the goal of this research is to find the motives behind the different proposition, this research can be characterized as an exploratory research.
The goals of exploratory studies can be obtained with the help of different techniques. Different authors (Cooper and Schindler (2006), Van der Velde, Jansen and Anderson (2004)) say that exploratory studies lean the most on qualitative techniques. Whereas quantitative techniques search for answers to “how much”, qualitative techniques search for answers to “what” questions (Cooper and Schindler (2006) or “how” and “why” questions (Yin, 1989). Also this research leans the most on qualitative techniques. The following paragraphs describe how the information from this research is gathered.
3.2 Data Collection
3.2.1 Expert Interviews
As mentioned above, to gather qualitative data, I have chosen to execute expert interviews. Expert interviews are a specific form of applying semi-structured interviews. According to Bogner and Menz (2002), expert interviews can be used with different aims. They suggest a typology of three alternatives; (1) exploration in new fields; (2) collect context information and (3) developing a typology or theory. Bogner and Menz (2002) say the exploration gives the possibility for orientation in new fields in order to give a thematic structure and to generate hypotheses. They say that this can also be used for preparing the main instrument in a study for other target groups. The collecting of context information can be used to complement insights coming from applying other methods. The developing of a typology or theory can concern contents and gaps in the knowledge of people working in certain institutions concerning the needs of a specific target group (Bogner and Menz, 2002). Because little scientific research is done about the subject of this research it is necessary to explore in the field, but also to collect extra context information. The expert interviews especially were used to complement the insights. Input for this expert interview was the initial conceptual model
Deeke (1995) define experts as persons who are particularly competent as authorities on a certain matter of facts. In this research the experts were chosen on the base of their authorities in the franchise business. Most important was that the experts had experience in franchisee advisory councils. The expert interviews started with one interview and followed by others. After 3 interviews all information was gathered and saturated. A short description of the interviewed experts is given below.
Expert 1 is a lawyer at an independent Dutch law firm which is specialized in the area of franchise and franchise related issues. This expert deals with inter alia franchise agreements, Declarations of Intent, lease agreements but most important the creation of by-laws for franchisee advisory councils. Because of the activities of regarding to the creation of by-laws of franchisee advisory councils, I have chosen to interview this expert.
experience in a Dutch franchise organization, I have also chosen to interview this expert.
To verify the added procedures of Experts 1 and 2, a third expert was interviewed. Expert 3 is also a lawyer at a Dutch law firm. His activities enhance mostly giving advice to retail- and franchise organizations on commercial and juridical issues. Besides that, he is specialized in the restructure and the design of the machinery of internal consultation. Because of his current restructuring of the FAC at a big Dutch drugstore, I was able to see which procedures worked or did not work in the old situation versus the new situation.
The outcome of these expert interviews can be found in chapter 4. These interviews resulted in a revised conceptual model.
3.3.2 Case study
As mentioned earlier, also case studies are executed in this research. Yin (1989) says that “how” and “why” questions are more explanatory and likely to lead to the use of case studies. This is because such questions deal wit operational links needing to be traced over time, rather than mere frequencies or incidence (Yin, 1989). Yin (1989) defines a case study as an empirical enquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used. He mentions five components of a research design that are especially important in case studies: (1) A study’s question, (2) its propositions, (3) its unit(s) of analysis, (4) The logic linking the data to the propositions and (5) the criteria for interpreting the findings (Yin, 1989).
(1)- Yin (1989) says that a case study strategy is most likely to be appropriate for “how” and “why” questions. The research question of this research is: “How must a franchisee advisory council be credibly organized, so this can contribute t the trust of franchisees in their franchisor?”
(2) - Yin (1989) says that each proposition directs attention to something that should be examined within the scope of the study. These propositions, besides reflecting an important theoretical issue, also begin to tell you were to look for relevant evidence. This is done through a literature review and expert interviews.related to the way the initial research question is defined. (Yin, 1989). The units of analysis in the case studies are franchisees.
(4) – The fourth component refers to the logic linking of data to the propositions. One approach for case studies is the idea of “pattern-matching” of Campbell (1975) whereby several pieces of information from the same case may be related to some theoretical proposition. Especially if the two patterns are considered rival propositions, the pattern-matching technique is a way of relating the date to the proposition. In this research also pattern-matching is used to analyze the results.In this research two cases are executed. Yin (1989) says that multiple-case designs have distinct advantages and disadvantages in comparison to single-case designs. The evidence from multiple cases is often considered more compelling, and the overall study is therefore regarded as being more robust. Every case should serve a specific purpose within the overall scope of inquiry. The logic underlying use of multiple-case studies is the same. Each case must be carefully selected that it either (a) predicts similar results (a literal replication) or (b) produces contrary results but for predictable reasons (a theoretical replication). An important step in all of these replication procedures is the development of a rich theoretical framework. The framework needs to state the conditions under which a particular phenomenon is likely to be found (a literal replication) as well as the conditions when it is not likely to be found (a theoretical replication). The cases were selected to produce contrary results but for predictable reasons.
In the first franchise system I have chosen to interview franchisees who were unsatisfied with the organization of their FAC. In the second system franchisees were interviewed who were satisfied with organization of their FAC. By choosing for contrary cases, there was tried to get insights in credibly organized FACs and incredibly organized FACs.
The franchisees that were interviewed were franchisees of DA Drugstores and Albert Heijn. In the DA-system different problems occurred in the system which led to unsatisfied and leaving franchisees (Franchise Formules, 2008), whereas in the AH-system there is a successful organized FAC which recently celebrated their 25th
franchisees were also approach. In total two franchisees of every system were interviewed. The systems are more extensively described in paragraphs 5.1 and 5.2. Table 3.2 gives a short overview of the main characteristics of executed case studies.
Table 3.2 Characteristics of executed case studies
System DA Druggists Albert Heijn
Number of interviewed franchisees 2 2
Selected franchisees Unsatisfied with Satisfied with organization of FAC organization of FAC
3.3 Validity
According to Yin (1989) construct validity, reliability and external validity are supposed to be measures to test the quality of the research design. Yin (1989) sees construct validity as the establishing of correct operational measures for the concepts being studied. Manners to increase the construct validity of the study is to use multiple sources of evidence, establish a chain of evidence and have key informants review the draft of the case study reports.
During this research different sources are used to increase the construct validity. Data is gathered through scientific literature, professional literature but also experts are approached to complement the initial conceptual model. Cooper and Schindler (2006) say that researchers need to make their measures operational; this can be done by making definitions of the things you measure. Researchers deal with two kinds of definitions; definitions from the dictionary and operational definitions. A definition from dictionaries helps to explain concepts with the help from a synonym, operational definitions are definitions made in terms of specific tests or measurable criterion (Cooper and Schindler, 2006). To take away the confusion about the different concepts in this research, all important concepts of the initial conceptual model from paragraph 2.3 are defined in table 3.3. The list of these concepts can also be found in appendix I.
tested on two different cases. The outcomes of this research are statistical not representative; there are only valid for the concerned cases. The outcomes of this research do end though in a theory, which may be tested in future research.
Yin (1989) also mentions the reliability of the research. He sees the reliability as demonstrating that the operations of a study – such as the data collection procedures – can be repeated with the same results. The goal of reliability is to minimize the errors and biases in a study (Yin, 1989). The general way of approaching the reliability problem is to make as many steps as possible as operational as possible. In this reserach this is done by extensively describing and operationalising the steps taken in this research.
Table 3.3 Operational definitions research
Concept Dutch Dictionary Definition Operational Definition
Credibility The trust which can be placed The trust which can be placed in the in the accuracy of the information accuracy of the procedures of a by an equipment or system FAC through the eyes of franchisees Funding procedures Procedures regarding the provision of Procedures regarding the provision
funds for a certain purpose of funds to make a FAC operational Meeting procedures Procedures regarding a gathering of Procedures regarding the gathering
people where issues are discussed and of members of the FAC where they decisions are made can discus and make decisions
regarding the franchise organization Replacement procedures Procedures regarding taking over the Procedures regarding taking over
place from another person or thing the place of a FAC member after an election period
Right procedures Procedures regarding the legitimate or Procedures regarding different moral authority of individuals or groups authorities of a FAC
Selection procedures Procedures regarding the preferred choice Procedures regarding the preferred of an item which is most suitable for a choice of FAC members which are setting or situation most suitable for a FAC board Procedures A routine or method to get things done Methods to execute a credible FAC
through the eyes of franchisees
3.4 Structure of Interviews
made. As mentioned before, the purpose of expert interviews was to complete and validate the findings from the literature. That is why the interview schedule of the experts is based on the initial conceptual model (see Appendix II). The interview schedule for the franchisees is based on the revised conceptual model (see Appendix III). The global design of the interview schemes and the argumentation of the design are described below.
3.3.1 Administrative question
Both the expert and the franchisee interviews started with administrative questions. The goal of administrative questions is to identify the participant, the interviewer and the setting in which the interview takes place. These questions are necessary to indentify patterns of possible mistakes. Examples can be the wrong target group for example (Cooper and Schindler, 2006). Both interview schedules started with the administrative questions.
3.3.2 Free Reaction Strategy
To prevent the respondents to give their preconceived opinion about the organization of a credible FAC, a free reaction strategy was applied. This free reaction strategy makes it possible for the respondent to formulate a complete own answer without being biased by other information (Cooper and Schindler, 2006). That is why the first two questions of both the interview schemes are open questions.
3.3.3 Target questions
During the experts interviews it was tried to make the instrument as complete as possible. At every expert interview there was room to add new procedures that were missing from the initial conceptual model. These added procedures were always supported by the respondent with arguments. In the following interviews these added procedures were displayed to the experts that followed. So during the expert interviews the initial conceptual model continuously was revised and developed further. By continuously revising the model, it was tried to design the most complete model as possible and ensure the internal validity. During the franchisee interviews the revised model was tested and there it was also the possibility to add procedures.
3.5 Data Analysis
During the data analysis “pattern-matching” was used. Pattern-matching is the logical linking of data to the propositions (Campell, (1975). The outcomes of the interviews from the expert interviews were written down and compared to each other. All the outcomes were placed in tables with the same structure as the initial conceptual model. Based on the outcomes, comparisons were made and conclusions were taken. The conclusions of the expert interviews resulted in a revised conceptual model.
4. RESULTS EXPERT INTERVIEWS
In this chapter the results of the expert interviews are described. The first paragraph of this chapter describes how the experts define a FAC and the goal of a FAC. Also the most important procedures through the eyes of the experts are given. The paragraphs that follow describe outcomes of the interviews with the experts regarding the propositions made in the initial conceptual model. Paragraph 4.7 describes added procedures regarding the system-wide focus of the FAC. This chapter ends in a revised conceptual model. This conceptual model is used as an input for the interviews for the case studies of chapter 5.
4.1 Characteristics FAC
During the expert interviews the experts were asked how they would define a FAC and what the main goal of a FAC should be. Besides that, they were asked what they thought to be the most important procedures at organizing a credible FAC. Table 4.1 gives an overview of the outcome regarding the definitions of a FAC and what the main goal of a FAC is through the eyes of the experts. Also the most important procedures, though the eyes of experts, are given in this table.
Table 4.1 Characteristics FAC according to Experts
Expert 1 Expert 2 Expert 3
Definition FAC Mechanism to facilitate Broad representation of Representation of communication between franchisees who discuss franchisees franchisor and franchisee with franchisor about discussing issues regarding practical progress system concerning system execution of system
Goal Look after interest Increase involvement Increase trust and of collective within system involvement
Most important procedures Election of members, Freely elected members, Communication, good representation credible representation support of 3rd of members, of members parties communication
execution of the system. According to this expert, the main goal of a FAC is to look after the interests of the collective instead of individual interests. Expert 2 defines a FAC as a broad representation of franchisees who discuss about the process of the system with the franchisor. The main goal of a FAC is, according to Expert 2, increasing the involvement of the franchisees in the whole practical and strategic policy of the system. In this process franchisees are involved in the management of the system at which as well short term as long term issues are discussed. Expert 3 defines a FAC as a representation of franchisees who discuss issues concerning the system with the franchisor. The goal of a FAC, according to Expert 3, is the increase of trust between franchisees and the franchisor. This expert says that this trust is mainly caused through the increase of involvement of the franchisees in the system. Looking at the definitions of these experts and the goals of the FAC, it can be concluded that the involvement of franchisees in the system is a very important issue regarding to the organization of a FAC.
The experts were also asked which procedures they think that are the most important procedures regarding the organization of a credible FAC. Expert 1 mentions procedures regarding elections, representation of franchisees and the communication to the members as the most important procedures. He says that if the members are elected and are representing all the different franchisees, the members of the FAC will be considered as a reflection of all the franchisees. If this representation is credible, all interest are likely to be considered, which will contribute to a credible organized FAC. He considers communication also as an important issue. When there is communication towards the grass roots, franchisees can see what the FAC is doing which also contributes to the credibility of the FAC. Expert 2 also mentions that if there is a credible representation of all the franchisees, most of the interest are covered, which will contribute to the credibility of the FAC. Expert 3 thinks, just like Expert 1, that communication is one of the most important procedure. If all the discussed issues are communicated to the franchisees, they are able to examine the FAC on their activities, which contributes to the credibility of the FAC. Expert 3 also mentions the role of 3rd parties as an important procedure. With
the support of a 3rd party, the FAC can be presented as an equal partner during
Based on these outcomes, it can be concluded that the involvement of franchisees in the franchise system is a very important issue regarding to the organization of a FAC. Besides that, credible representation of franchisees in the FAC and communication are considered as very important procedures through the eyes of the FAC. The experts say that if there is a credible representation of all the franchisees, most of the interests are covered which will contribute to the credibility of the FAC. Besides that, if the FAC communicates the discussed issues to the franchisees, the activities of the FAC can be examined which also contributes to the organization of a credible FAC. The following paragraphs describe the outcomes of the interviews with the experts regarding the other procedures made in the initial conceptual model.
4.2 Procedures regarding the funding and creation of the FAC
The first variable that was described in the literature review where procedures regarding the funding and creation of the FAC. The literature said that the FAC should be jointly funded (Aronson, 2004; Bukalesh, 2000) and that the FAC should be jointly created (Dweyer, 2008; Bukalesh 2000). This paragraph describes the outcomes of the expert interviews regarding these subjects. Table 4.2 gives an overview of the outcomes regarding the procedures of the funding and creation of the FAC.
Table 4.2 Propositions for procedures regarding the funding and creation of the FAC Procedures regarding the funding of the FAC Expert 1 Expert 2 Expert 3
Jointly funding of FAC All expenses for Yes Yes franchisor
Jointly creation of FAC Yes Yes Yes
