Academic journal article Journal of Management and Organization

Franchising as a Path to Self-Employment for Australian Female Entrepreneurs

Academic journal article Journal of Management and Organization

Franchising as a Path to Self-Employment for Australian Female Entrepreneurs

Article excerpt

ABSTRACT

This paper provides a better understanding of the motivational incentives driving franchising choice from the female franchisee's perspective. A qualitative methodology was adopted in this research to gain a clearer picture of the salient issues influencing female entrepreneurs' evaluations of alternative business models when making the self-employment decision. A sample of 14 female franchisees and 12 female independent business owners was interviewed to gather data on the reasons supporting a woman's initial decision to enter self-employment. Major contrasts have been identified between female franchisees and independent business owners suggesting that franchisors need to re-design their selection strategies and communication methods to promote female participation, sustain system wide growth and add creative diversity in franchise systems that have limited growth potential due to the lack suitable franchisees.

Keywords: Australia; female franchisees; motivational incentives; self-employment; SME

Women are one of the fastest growing populations of entrepreneurs and make significant contributions to innovation, job and wealth creation around the world (Minniti et al. 2005). Within Australia more than 32 percent of small businesses are owned and operated by women, with the growth in female-owned businesses exceeding rates of growth in male-owned enterprises (Australian Bureau of Statistics 2003). However, despite this contribution, female entrepreneurship is under-researched and previous studies have been criticised on account of an over-reliance upon male-gendered measuring instruments (Stevenson 1990) and inadequate assessments of the full range of women's entrepreneurial traits and behaviours (Lewis 2006; Martin 2000). In addition, many studies (somewhat erroneously) have treated female entrepreneurs as a homogeneous population which has fuelled recent calls for deeper assessments of the role of individual, situational and experiential influences upon women's self-employment decision and choice of preferred business model (De-Bruin & Lewis 2004; McKay 2001).

One such business model is franchising, that to date, has received little attention in the female entrepreneurship literature. This is curious given that this business model offers specific benefits to women entrepreneurs who are often disadvantaged in acquiring capital financing, training and managerial advice (Boden & Nucci 2000; Still & Guerin 1991). In particular, franchising provides individuals with expedient access to capital, market knowledge, training and ongoing support (Castrogiovanni et al. 2006). However, although the Australian franchising sector has been coined the 'franchise capital of the world' (Walker 2004b: 36) because it has over three times the number of systems per capita than the United States, women's participation in franchising is much lower than in independent small business (Frazer et al. 2006). Given that franchisors consistently cite difficulty in recruiting franchisee candidates, franchisors may need to re-evaluate the motivational incentives governing franchising choice and revise the profile of what constitutes a suitable franchisee so as to encourage greater female participation (Frazer & Weaven 2004).

Franchising is a legally binding business arrangement whereby a firm permits an individual or company the right to conduct business in a prescribed manner within a specified geographic region during an agreed upon time period in return for fee payments and royalty contributions (Justis & Judd 2004). Although this business model has often been touted as a means to providing opportunities to minority groups and women (Hunt 1977; Knight 1984), a recent national survey revealed that only 11 percent of franchise sole-owners in Australia were women (Frazer & Weaven 2004), far below the reported 33 percent of female small business owners (Australian Bureau of Statistics 2003). …

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