Innovation within Franchise Service Systems through Entrepreneurial Bricolage

Senyard, Julienne and Watson, Anna and Dada, Lola (2018) Innovation within Franchise Service Systems through Entrepreneurial Bricolage. In: 7th ACERE Conference, 2018-02-06 - 2018-02-09, Gardens Point Campus, Queensland University of Technology.

Abstract

Despite much of the dominant narrative within media arguing that franchising and entrepreneurship are very separate domains, more and more research in entrepreneurship suggests that franchisees can behave entrepreneurially (Ketchen et al., 2011). Little is known, however, about how these behaviours and processes occur within 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, 27-28)). Many franchisees are bound to follow the rules and regulations of the franchisor, and this creates constraints on decisions to innovate and entrepreneurial activities. We evaluate how franchisees may overcome these constraints through acts of innovation and “hidden” bricolage (Boxembaum & Roleau, 2011). Bricolage, defined as “making do by applying combinations of the resources at hand to new problems and opportunities” (Baker & Nelson 2005: 333), may be particularly relevant as established franchising processes restrict innovative activities. Franchisees may be forced to be resourceful and innovate with only the resources on hand. Franchisor attempts to suppress local innovations through withholding resources or by invoking normative sanctions may motivate greater use of bricolage and shape the types of innovative behaviour within the franchise system. Franchisee innovations created through bricolage, without the knowledge of the franchisor, are likely to be limited to a single unit, with unpredictable consequences. Prior research suggests that bricolage creates innovative solutions that enhance performance (Garud & Karnoe, 2003) yet others suggest may create barely “good enough” responses (Ciborra, 1996) limiting firm performance. These constraints and bricolage processes (Baker, 2007) by franchisees have not been previously explored in either franchising or entrepreneurial bricolage literature. Such research is important. Franchise systems may suppress growth by not supporting successful innovations, yet face enormous costs if franchisees ignore the control systems and create botched innovations within established franchises. These costs -in damage to the franchise brand, fines, missed opportunities, and diversion of franchisor attention to deal with the crises-can ensure franchise failure. With franchising contributing over $146 billion to the Australian economy (FCA, 2017) decisions regarding innovative entrepreneurial behaviour in franchising may have broader implications. Thus, this project seeks to investigate the process of service innovation in franchise networks, specifically examining innovation “by stealth”, where the franchisor is unaware that innovative activities take place. The research objectives are to • Investigate how organisational control (system rigidity) influences decisions to innovate and disclose innovations within the franchise system. • Explore the role of different types of constraints on entrepreneurial bricolage behaviours.