A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence

• DOI: http://doi.org/10.1111/ijmr.12123
• Author: Olufunmilola (Lola) Dada
• Published date: 01 April 2018
• Date: 01 April 2018

International Journal of Management Reviews, Vol. 20, 206–226 (2018)

DOI: 10.1111/ijmr.12123

A Model of Entrepreneurial Autonomy in

Franchised Outlets: A Systematic Review

of the Empirical Evidence

Olufunmilola (Lola) Dada

Department of Entrepreneurship, Strategy and Innovation,

Lancaster University Management School, Lancaster LA1 4YX, UK

Email: l.dada@lancaster.ac.uk

Entrepreneurial autonomy among franchisees is a persistent management challenge.

There is a lack of empirical synthesis of its drivers, its consequences, and howit can be

integrated with the standardization requirements in franchise systems. Various theo-

retical and empirical studies have stressed that merging franchisee autonomy with the

franchisor’sdesire for uniformity is extremelydifficult. This paper aims to provide a sys-

tematic reviewof the relevant empirical studies in order to identify a range of influences,

controls, outcomes and associated moderating and mediating factors that offer a better

representation of what contributes to the understanding of franchisee entrepreneurial

autonomy.By drawing together findings from a broad rangeof theoretical perspectives,

the evidence was used to develop a comprehensive model of entrepreneurial autonomy

in franchised outlets. The model not only providesa structure that brings together prior

studies, but also identifies the less researched areas that can advance the management

literature on the notion of autonomy in franchising. The research and practitioner im-

plications of the review and its limitations and possible directionsfor future studies are

discussed.

Introduction

Although the entrepreneurial autonomy of the fran-

chisor is undisputed, studies relating to franchisee en-

trepreneurial autonomy have been split, complicated

and continue to be strongly debated (e.g. Barth´

elemy

2008; Bradach 1997; Dada and Watson 2012, 2013;

Darr et al. 1995; Davies et al. 2011; Evanschitzky

et al. 2016; Gassenheimer et al. 1996; Kaufmann

and Eroglu 1998; Nijmeijer et al. 2014; Sorenson

and SØrensen 2001; Watson et al. 2016; Yin and

Zajac 2004; Zachary et al. 2011). As entrepreneurial

autonomy and franchising are diametrically opposed

concepts, many have questioned how entrepreneurial

I am grateful to the Associate Editor, Dr Dermot Breslin, and

the anonymous reviewers for their valuable comments.

An earlier version of this article was presented at the Institute

for Small Business and Entrepreneurship (ISBE) Conference

(2014).

autonomy among franchisees can be aligned with the

standardization requirements on which the franchise

system is built (for discussions, see Birkeland 2002;

Clarkin and Rosa 2005; Dada et al. 2012; Dant and

Gundlach 1999; Hoy 2008; Kaufmann and Eroglu

1998; Ketchen et al. 2011; L´

opez-Bay´

on and L´

opez-

Fern ´

andez 2016; Paik and Choi 2007; Pizanti and

Lerner 2003). There has been no known attempt to

juxtapose empirical findings to produce a systematic

reviewas to how franchisee entrepreneurial autonomy

is positioned in terms of relevance. The present paper

aims to address this gap in the literature by provid-

ing a systematic review of empirical studies in order

to identify a range of influences, controls, outcomes,

and moderating and mediating factors, which offer a

better representation of what contributes to the under-

standing of franchisee entrepreneurial autonomy.

Autonomy is an established concept in the man-

agement literature (Lumpkin et al. 2009): ‘In an or-

ganizational context, it refers to action taken free

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Entrepreneurial Autonomy in Franchised Outlets 207

of stifling organizational constraints’ (Lumpkin and

Dess 1996, p. 140). Although several types of au-

tonomy have been conceptualized (e.g. Caza 2012;

Langfred 2004, 2005), the present paper focuses on

‘entrepreneurial’ autonomy, which underpins many of

the management challenges in franchising.1Drawing

on Lumpkin et al. (2009), franchisee entrepreneurial

autonomy is here defined as the extent to which fran-

chisees are able to exercise independence of thoughts

and actions to operate freely outside the standardized

confines of the franchise system. It could be argued

that franchisee entrepreneurial autonomy can lead to

improved performance, as autonomy when it occurs

in the form of franchisee innovation can benefit the

franchisor, in terms of increased local market adapt-

ability and increased chain-wide innovation (Combs

et al. 2004). However, franchisee entrepreneurial au-

tonomy is widely frownedupon, as it can lead to fran-

chisee non-compliance (Davies et al. 2011; Weaven

et al. 2010), deviation from the franchisor’s proven

standards (Cox and Mason 2007), franchisee free rid-

ing (Kidwell et al. 2007), loss of corporate identity,

trademark erosion and quality deterioration (Cox and

Mason 2007; Paik and Choi 2007).

It is therefore evident that the notion of franchisee

entrepreneurial autonomy raises several questions.

The major contribution of the present review is the

building of a comprehensive model, which draws to-

gether empirical evidence from diverse theoretical

perspectives to identify the core factors and the asso-

ciated secondary factors that are important for under-

standing franchisee entrepreneurial autonomy.

Two notable reviews on franchising have appeared

recently in the management literature – the papers

by Combs et al. (2011) and Nijmeijer et al. (2014).

Combs et al.’s (2011) review focused on recent in-

sights about franchising, its causes, its effects and

factors that shape these relationships, as well as the

implications of a multidisciplinary perspective for

franchising research. In the other review by Nijmeijer

et al. (2014), they focused on collecting all the em-

pirical evidence on the factors that make franchising

work and to bring this evidence together in an inte-

grative framework. Unlike both these studies, which

have a broad focus, the present review differs in that

it focuses on one persistent management challenge

1This paper focuses on business format franchising, which

‘occurs when a firm (the franchisor) sells the right to use its

trade name, operating systems, and product specifications to

another firm (the franchisee)’ (Castrogiovanni et al. 2006,

p. 27–28).

in franchising, i.e. franchisee entrepreneurial auton-

omy. This gap in understanding is important because

franchisee entrepreneurial autonomy goes against the

essence of franchising, which is centred on uniform

replication of the franchisor’s proven business con-

cept in different locations (Dada and Watson 2012,

2013; Dada et al. 2012).

In the next section of the paper, the methodology

adopted for the reviewis discussed, prior to presenting

the results. The implications, limitations, directions

for future research and conclusion of this review are

discussed in the final sections of the paper.

Methodology

This study employed a systematic literature review

methodology (Cook et al. 1997; Denyer and Neely

2004; Pittaway et al. 2004; Thorpe et al. 2005;

Tranfield et al. 2003) that focused on identifying key

scientific contributions, and developing an evidence

base that exceeds those of a single study (Hakala

2011). This methodology was suitable because it en-

abled development of a reliable knowledge stock by

synthesizing prior research in a transparent and sci-

entific manner (Tranfield et al. 2003). It addresses

weaknesses of traditional narrative reviews that have

been criticized for lack of rigour, as the selection of

studies for inclusion are subject to researchers’ bias

(Tranfield et al. 2003).

Data collection

Inclusion criteria. To determine the studies to

include in this review, three categories of in-

clusion criteria were employed, following Wang

and Chugh (2014). These consisted of determin-

ing the search boundaries, identifying the search

terms and specifying the coverage period. First, the

search boundaries were set as electronic databases,

namely, ABI/INFORM Complete (ProQuest), Busi-

ness Source Premier, JSTOR, ScienceDirect, Web of

Science and Wiley Online Library.Second, the search

terms identified were the dominant additional termi-

nologies used in the literature to capture franchisee

entrepreneurial autonomy. These were franchisee

independence, innovation,creativity, invention, adap-

tation, new ideas, new opportunities, initiatives, flex-

ibility, entrepreneurial orientation, entrepreneurial

behaviour, entrepreneurial activity and entrepreneur-

ship (e.g. Akremi et al. 2011; Barth´

elemy 2008;

Bradach 1997; Dada et al. 2012; Dada and Watson

C2016 British Academy of Management and John Wiley & Sons Ltd.