How do the top franchises recruit new franchisees?

This question was what we set out to answer in our paper: Franchise branding: An organizational identity perspective , published in the Journal of the Academy of Marketing Science.

Growing entrepreneurial ventures at a rapid clip in a sustainable way is challenging in the best of times. Franchising provides a valuable mechanism for doing so while preserving valuable resources. However, attracting the right franchisees is clearly very important for firms opting for this growth mechanism as bringing on the wrong franchisee can spell problems for entrepreneurs.

As content analysts, we were naturally interested in how the top franchisers present themselves to potential franchisees differently from everyone else. It didn’t fully click with us at the onset, but our reviewers helped us to find that we were looking at the branding of franchises. So we set out to examine the role of language in franchise branding. Specifically we sought to understand how franchisers used language associated with entrepreneurial orientation, market orientation, and charismatic language to attract franchisees.

Perhaps unsurprisingly, we find that top franchisers tend to use more language associated with an entrepreneurial orientation (i.e., autonomy, competitive aggressiveness, innovativeness, proactiveness, and risk taking; Lumpkin & Dess, 1996). Franchisees essentially become entrepreneurs unto themselves when launching a franchise. While the structure of these ventures differ from what we often think of when we discuss entrepreneurship, franchisees nevertheless take bold entrepreneurial action in the face of uncertainty. Our findings highlight the importance of communicating with potential franchisees as such.

We also find that top franchisers tend to use more language associated with a market orientation (i.e., Customer Orientation, Competitor Orientation, Interfunctional Coordination, Long-Term Focus, and Profitability; Narver & Slater, 1990). Firms that are more market oriented routinely outperform those that do not. Accordingly, top franchisers should want to identify franchisees who are market oriented and may communicate this orientation in franchisee recruitment materials. Here too, our findings point to a higher emphasis on market orientation among top franchisers.

The role of language associated with charismatic leadership in franchisee branding is less pronounced. On the one hand, the franchiser-franchisee relationship is not dissimilar from the leader-follower relationship, and charismatic leaders tend to be particularly effective at influencing followers to forsake their individual interests for the advancement of the collective (e.g., Shamir & Howell, 1999). In-line with this, we find that the top franchisers do generally use more charismatic rhetoric. On the other hand, we find that this effect is primarily driven by the collective focus, values, and tangibility dimensions of such rhetoric.

On the whole, there do seem to be significant differences in the way that top franchisers communicate with potential franchisees. I suspect that these differences of language in franchise branding are not limited to entrepreneurial orientation, market orientation, and charismatic rhetoric. Perhaps better understanding these differences may provide key insights that help entrepreneurs pursuing a franchising growth strategy do so faster and more sustainably.