Franchising and Franchisee Behavior: An Examination of Opinions, Personal Characteristics, and Motives of Canadian Franchisee Entrepreneurs

By Withane, Sirinimal | Journal of Small Business Management, January 1991 | Go to article overview
Save to active project

Franchising and Franchisee Behavior: An Examination of Opinions, Personal Characteristics, and Motives of Canadian Franchisee Entrepreneurs


Withane, Sirinimal, Journal of Small Business Management


FRANCHISING AND FRANCHISEE BEHAVIOR: AN EXAMINATION OF OPINIONS, PERSONAL CHARACTERISTICS, AND MOTIVES OF CANADIAN FRANCHISEE ENTERPRENEURS

Over the past few years, many of the new enterprises that have been emerging in Canada are franchises. A wide variety of products and services are now available through franchises--from milk and prescription drugs, to real estate, dental, and hotel services. Franchising has become a popular business alternative due to its favorable reputation of being a proven business format for entrepreneurs. Statistics show that over one-third of all retail sales in Canada are generated from franchising, and these figures are rapidly growing (Franchising Annual 1987). In 1987, Canada's 1,700 franchisees and 42,000 franchises recorded sales of about $45 billion which amounted to approximately 45 percent of Canadian retail sales.

Almost 35 percent of Canadian businesses are controlled by Americans, either by means of area franchises such as McDonald's restaurants of Canada Ltd., or through unit-by-unit franchises directly from headquarters in the United States (Knight 1986). Likewise, Canadian franchises own more than 2,000 units in the United States and elsewhere.

A recent survey by the Retail Council of Canada showed that 79 percent of franchises respondents felt they had made the right decision in purchasing a franchise. Fifty-five percent indicated that they would make that same decision again.

RESEARCH OBJECTIVE

The purpose of this study is to examinee and analyze the behavior of Canadian franchisees. In doing so, we first explore the perceived importance of success factors in franchising, and the degree to which subjects manifest them. Second, we examine personal characteristics of franchisees, and their attitudes and opinions toward franchising. Third, we examine the reasons behind choosing to join franchise operations (Metro Toronto Business Journal 1986), rather than starting an independent business. Fourth, we determine which form of business is regarded as being more entrepreneural--franchising or operating an independent business.

FRANCHISING DEFINED

It appears that franchising has no set definition, as it holds many differet researchers. Bain (1986) defines a franchise as a contractual privilege granted by an individual or company (owner) to another individual or company. Norback and Norback (1982) view franchising as a license from the owner (franchisor) of a trade or service mark permitting the user (franchisee) to market a product or service under that name in accordance with the franchisor's system. Justis and Judd (1986) suggest that franchising is a distribution method which is being used by businesses for growth and expansion. For Ayling (1987), franchising is a method of raising capital by and for the franchisor.

The contractual privileges and licensing distribution of franchising is unique to each industry or organization. Often franchisers provide franchisees with a slightly different package of goods and permit each franchisee to employ a different method of operation (Mackenzie 1985). The franchising arrangements very from nonexclusive distributorship or sublicense agreements, to "an arrangement under which one party grants another the right to operate a business in accordance with prescribed operating methods and procedures controlled by the grantor" (Franchising--An Information Source 1979). According to the Canadian Federal Department of Industry, Trade and Commerce (1979), franchisors allow franchisees to use their knowledge, expertise, trade marks, and other distinguishing features or names.

When a Canadian franchisor enters into an agreement with a Canadian franchisee, the latter obtains an exclusive right, within a certain locality, to operate the franchised business for five years with an option to renew the agreement for another five years. In addition, the Canadian franchise package states that the option provided to the franchisee by the franchisor cannot be terminated within that period.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Franchising and Franchisee Behavior: An Examination of Opinions, Personal Characteristics, and Motives of Canadian Franchisee Entrepreneurs
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?