University of Hertfordshire

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Original languageEnglish
JournalIndustrial Marketing Management
Early online date2 Apr 2020
DOIs
Publication statusE-pub ahead of print - 2 Apr 2020

Abstract

Franchising, as an imitative business model, provides a challenging context to create and manage innovation, as franchisors may wish to limit their franchisees’ innovative activities to ensure network consistency. Drawing on data from two related empirical studies of franchisees operating in the UK, we seek to understand how franchisees contribute to innovation within their systems. Our first quantitative study reveals that although many franchisees develop innovations, these innovations are not always adopted by the franchise system, suggesting acts of hidden innovation. These findings motivated our second, qualitative study. Through a case analysis of 29 franchisees from 7 different franchise systems, we identify a number of organizational and relational factors that influence both franchisee engagement in innovation, and the extent to which their innovations are disclosed to the network. From these, we develop a theoretical framework of franchisee-led innovation processes, which contributes to the role of social exchange theory in innovation practices within business-to-business contexts. Our findings extend emerging research on innovation in franchise systems, and also provide practical insights on how franchisees can be best supported in creating and disclosing innovations to benefit the franchise system.

Notes

© 2020 Elsevier Ltd. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence http://creativecommons.org/licenses/by-nc-nd/4.0/.

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