Identity in Franchise Systems: The Role of Franchisee Associations

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Journal of Retailing 87 (3, 2011) 285–305

Identity in Franchise Systems: The Role of Franchisee Associations

Benjamin Lawrence ∗, Patrick J. KaufmannBoston University, United States

bstract

Utilizing theories of identity this article presents findings from a qualitative study regarding the significant role independent franchisee associationslay within franchise systems. The data reveal that successful franchisee associations help manage the inherent tension that exists betweenooperation and conflict in franchise relationships. A distinctive adaptive organizational identity provides an association the capability necessaryo reframe its relationship with the franchisor as either combative or cooperative in response to changes in a franchisor’s identity. Challenging
he views of both franchisor stability and the dyadic form that franchisee–franchisor relationships assume, behavioral insight is provided into thectual functioning of franchise systems and new avenues are suggested for theory building in franchising.
2010 New York University. Published by Elsevier Inc. All rights reserved.

eywords: Franchise system; Franchisee associations; Franchisee–franchisor relationship; Organizational identity

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Identity in franchise systems: the role of franchiseeassociations

“For the younger generation, of which I am a part, we must nottake for granted ‘The Hard Way’ that our forefathers enduredfor this brand. They took the high road and worked arduouslyto pour a solid foundation so that the brand could be sustained.This foundation took years to perfect and must be maintainedto preserve our heritage, our rights and our future. It is ourresponsibility and obligation to understand our heritage andour rights so that we may continue this great brand that theColonel himself entrusted to us. We are a family, and I thinkyou will see that reiterated throughout every page in thishistorical reflection. Family is what brought me to KFC andthe AKFCF, and I have so many extended family membersbecause of this affiliation.” Michelle Hunt – Editor AKFCFQuarterly (The KFC Franchisee Association Newsletter)

The statement above from the KFC franchisee associationewsletter highlights an organization that has real impact on theived experiences of franchisees and the systems in which they
perate but has been largely ignored in franchising research –he independent franchisee association. Although relationshipsmong franchisees, have been found to influence franchisee
∗ Corresponding author.E-mail address: [email protected] (B. Lawrence).

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022-4359/$ – see front matter © 2010 New York University. Published by Elsevier Ioi:10.1016/j.jretai.2010.11.003

ttitudes and behavior (Dickey 2003; Kalnins and Chung006) franchising researchers have just begun to acknowledgehe existence of formal organizational structures that embodyuch relations (see Cochet and Ehrmann 2007; Lawrence andaufmann 2010 for examples). Several researchers have recog-ized the potential countervailing power of these structures (i.e.,rgyres and Liebeskind 1999; Carney and Gedajlovic 1991;rünhagen and Mittelstaedt 2002), but none have examined how

hese associations actually function within franchise systems.This lack of research is surprising because independent fran-

hisee associations have emerged as important, influential androlific structures within modern franchise systems and haveroused a great deal of interest among practicing franchiseawyers (e.g., Barkoff and Green-Kelly 2006; Burzych, Karp,nd Satterliee 2004; Selden 2000; Spandorf and Barkoff 2003).oreover, as confirmed via the authors’ research all but eight

f the top 20 largest franchise systems have currently activendependent franchisee associations. Of the remaining eight

cDonalds, Ace Hardware, Marriott, Hilton, Re/Max, Coldwellanker, and Health Mart all have some kind of advisory coun-ils comprised of franchisees. Furthermore, the Federal Tradeommission has recognized the potential influence of franchiseessociations and as of July 1, 2008 amended its Franchise Ruleandating explicit disclosures in each system’s Franchise Dis-

losure Document (FDD) of the existence of any independentssociation (or alternative form of franchisee group) request-ng such recognition. Just as initial explanations of franchisingased on the assumption of single-unit franchising failed to con-

nc. All rights reserved.

dx.doi.org/10.1016/j.jretai.2010.11.003

mailto:[email protected]

dx.doi.org/10.1016/j.jretai.2010.11.003

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86 B. Lawrence, P.J. Kaufmann / Jou

ider the growth and impact of multi-unit franchising (Kaufmann996; Kaufmann and Dant 1996), the general assumption thatolitary franchisees act alone in dyadic relations with the fran-hisor ignores the complexity of inter-franchisee relations ashey operate today.

For the past 40 years, franchise research has been dominatedy two such approaches (1) a focus on the structural charac-eristics of the franchise form and (2) an examination of theink between psychological traits of franchisees and their atti-udes and behavior. Economic theories explaining franchisingnd the resultant structures of franchise systems enjoy a welleserved prominence in the literature (see Blair and Lafontaine005). The primary focus of that approach has been on under-tanding the incentives that achieve optimal efficiency withinhe franchise system (Brickley and Dark 1987; Rubin 1978).owever, the only relationship of interest is that between fran-

hisor and franchisee and both parties are assumed to be contextree economic actors. The second approach has been to exam-ne the psychological traits of franchisees and link those traitso attitudes including satisfaction (Hing 1995; Morrison 1997)nd behaviors (Jambulingam and Nevin 1999). Again, the onlyxamined relationship is between franchisor and franchisee, andranchisees are assumed to be individual psychological actors.either approach recognizes any social context or formal orga-ization in which inter-franchisee relationships are enacted.ith few exceptions the scope of franchising research has been

imited to this dyadic model. Formalized inter-franchisee rela-ionships and the potential of such groups in mediating theelationship between individual franchisees and the franchisorave not been considered as important components or influ-ncers in the franchise system.

Each franchise system is comprised of two distinct legalntities, the franchisee and franchisor, who although they areembers of a single superorganization (Reve and Stern 1979)

ave both shared and competing goals. As the often used taglinef franchising, “work for yourself, not by yourself” illustrates,ranchising agreements create a unique relationship betweenranchisor and franchisee. To outsiders the franchisee mayesemble a quasi-employee of the firm and has been character-zed as giving up his or her own identity to assume the identityf the franchisor (Caves and Murphy 1976). However, unliken employee working within an authority based hierarchy, fran-hisees are legally independent contractors that typically viewhemselves as equal partners with the franchisor. The franchiseessociation resides within this complex superorganization androvides a way for these independent contractors to interactollectively with the franchisor.

The interdependent relationship between franchisor andranchisees creates significant managerial challenges for bothranchisee association leadership and franchise system corpo-ate management as franchisee based organizations enact theirnique, collective identity within franchise systems in some-hat the same way that unionized employees do within wholly
wned firms. Collaborative relationships between system man-gement and franchisee associations may lead to greater systemide efficiencies. However, associations that focus attentionn their collaborative work with the franchisor and on accom-
etae

f Retailing 87 (3, 2011) 285–305

lishing collective goals may be unable to control membererceptions of co-optation and fail to maintain their identitys legitimate autonomous bodies. Conversely, the countervail-ng power (Galbraith 1954) afforded such associations and theotential for adversarial relationships arising from in-group/out-roup distinctions are a potentially powerful uniting force forranchisees looking to assert their role as autonomous agents. Asuch, franchisee associations can consciously fortify the identityisparity between franchisee and franchisor, building solidaritymong their members by highlighting an adversarial combativeelationship. When franchisee associations fail to temper thisias however, conflict between franchisor and franchisee maypiral out of control and destroy any hope for working togetheror the good of the system.

In examining the management of these franchisee associ-tions, we seek to understand the role organizational identitylays in their maintenance. Because some independent fran-hisee associations endure while others fail, we ask the followinguestions: what characteristics give rise, and sustenance, to theserganizations and how do these organizations manage the inher-nt tension between cooperation and conflict? Our data suggesthat an adaptive association identity interacts with the perceivednstability of franchisor identity to provide the critical factorsetermining their continued existence. In order to survive, fran-hisee associations, like labor unions, must strike the balanceetween cooperative and combative behavior (Hammer andtern 1986) to assert both their autonomy and interdependenceis-à-vis the franchisor. Such shifts in identity accomplish theual task of maintaining solidarity and control among their mem-ership while also working constructively with their franchisoranagement team to foster efficient system operation and enact

hange when necessary. The purpose of this paper is to developtheoretical framework to understand such identity dynamics atork within franchising. We propose that the creation and main-

enance of an adaptive identity enables associations to react tohanges in a franchisor’s corporate identity, facilitating cooper-tive behavior with the franchisor while also working to temperhe in-group/out-group bias that, while enhancing franchisee sol-darity, threatens continued franchisee–franchisor collaboration.

Utilizing theories of organizational identity to help interpretur findings in the field we work towards an emic understandingf the functioning of these independent franchisee associa-ions. In doing so, we address the call for research that takesphenomenological approach to the development of theory thathallenges prior conceptualizations of franchising (Dant 2008).irst we briefly review the relevant theory and describe theeatures of franchisee associations. Then in the sections thatollow, we use qualitative data to inductively build our concep-ualization of a dynamic association identity around three keynsights; (1) identity (in)stability (on the part of both franchiseend franchisor) as a key variable in understanding the function-ng of franchisee associations, (2) the necessity of an adaptivessociation identity to temper intergroup bias and foster coop-
ration while maintaining solidarity among members and (3)he capability for such adaptation rooted in traditions, ritualsnd artifacts, free spaces, franchisee stability, democratic gov-rnance and financial resources. We then discuss our findings

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s they relate to the potential for further theory development ondentity in franchising.

rganizational identity

Organizational identity helps members of an organizationnswer the question “Who are we?” (Albert, Ashforth, andutton 2000), by describing what is central, distinctive and

nduring about the organization (Albert and Whetten 1985).ust as the perception of one’s self is constructed through bothembership in, and separation from, particular groups (Ashforth

nd Mael 1989; Tajfel and Turner 1979), an organization alsoonstructs its identity through such a comparative process. Therganization, situated in its broader environment, answers theuestion “who are we?” in part by answering the question “whore they?”, that is, by comparing its own identity with the per-eived organizational identity of other groups in its environment.his reflexive iterative process of interaction with other groupselps to construct and update a group’s distinctive identity.

Within a typical franchise system, there are multiple sub-rganizations, each with its own identity. For example, theranchisor (as distinct here from the overall franchise system) istself an organization comprised of those individuals who cur-ently own and manage the overall system. Because our focus inhis paper is on the organizational identity of the franchisee asso-iation, other organizations both outside and within a franchiseystem (including the franchisor organization) are importantecause they form the environment that helps define the focalranchisee association’s identity. For our purposes, therefore,he franchisor organization’s identity is defined in terms of howutside constituents (including the franchisee association) viewhat organization not the way that members of the franchisorrganization (i.e., those individuals running the franchisor cor-oration) might view it themselves. To highlight this distinctione use the term franchisor’s corporate identity to refer to therganizational identity of the current franchisor ownership andanagement team as perceived by franchisees and the franchisee

ssociation (this definition follows corporate identity as definedy Bhattacharya and Sen 2003).

Changes in an organization’s environment, including changesn the identity of key stakeholders (i.e., the corporate identityf the franchisor for franchisee based groups), may becomencongruent with the organization’s current identity requiringhe organization to adapt its identity in order to survive (Gioia,chultz, and Corley 2000; Scott and Lane 2000). Though orga-izational identity described by Albert and Whetten (1985) isefined as the collective understanding of that which is central,istinctive and enduring about the organization, an appreciationhat identity is somewhat adaptive and changeable over timeAlbert and Whetten 1985; Brown and Starkey 2000; Duttonnd Dukerich 1991) introduces a paradox – that organizationaldentity is both fluid and stable. The paradox is addressed byhe work of Gioia, Schultz, and Corley (2000) who describe
rganizational identity as dynamically adaptive and differenti-te between an enduring identity and one with continuity. Annduring identity, one that remains the same over time withermanency, is conceptually problematic in light of changes in
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f Retailing 87 (3, 2011) 285–305 287

nvironmental conditions that require an organization to adaptGioia, Schultz, and Corley 2000). On the other hand, an identityhat is continuous retains labels and values over time while shiftsn the interpretation and meaning of those labels allow for adap-ation to dynamic environmental conditions (Gioia, Schultz, andorley 2000). In other words, though certain labels given to the

dentity may remain stable (e.g., upholding the values of theounder and thinking of ourselves as a family, see the openinguote), the meaning ascribed to those labels (i.e., what it meanso be a family member or to uphold the values of the founder)an change over time. In this paper we adopt Gioia, Schultz, andorley’s (2000) dynamic view of organizational identity andrgue that it is specifically this adaptive capability that enableshe survival of franchisee associations in the long term.

Franchising is a particularly interesting context to study theanagement of organizational identity, as franchisees are nei-

her full time employees nor independent entrepreneurs. Likeontract workers (George and Chattopadhyay 2005) or unionembers (Fullagar and Barling 1991) they have multiple, some-

imes competing, work groups with which to identify. Evenhough the loss of individual identity has been defined as a hall-

ark of the franchise relationship (Coughlan et al. 2006, p. 518)esearch exploring identity theory in a franchising context haseen limited (for exceptions see Rometsch and Sydow 2006;llrich et al. 2007). Ullrich et al. (2007) examined franchisee

mployee’s identification with both their immediate work groupt the franchisee level (lower order categorization) and with theranchisor (higher order categorization). They found that work-roup identification predicts customer-orientated behavior whileranchisor identification predicts corporate citizenship behav-or. Rometsch and Sydow (2006) have examined the process ofonstituting identity in a case study of a German McDonald’sranchise system. They conclude that the lack of social spaceor creating a distinct German organizational identity results inhe dominance of the overall McDonald’s identity. They do sug-est that franchisee based groups and conferences may providevenues for independent franchisee organizational identity tomerge and propose that future work examine this process ofdentity construction. Though both studies acknowledge fran-hising as a potentially fruitful context for developing theoryegarding identity; neither investigates the unique identity pro-esses inherent in the formation or maintenance of franchiseeased groups.

ranchisee associations

As noted above, almost all mature systems have some sortf franchisee based organization. These organizations can berrayed along a continuum from entities that are totally fran-hisor funded and supported (often referred to as franchiseedvisory councils – or FACs), to franchisee created and sup-orted structures (often referred to as independent franchiseessociations – or IndFAs), to ad hoc groups created for the simple
urpose of litigation. FACs are typically comprised of franchisorppointed or elected franchisees and play a formal communi-ation role within the system. Although ostensibly designedo represent franchisee interests, FACs are often unidirectional

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Table 1List of franchise systems.

Franchise system Association 2009 USfranchisees

7-Eleven National Coalition ofAssociations of 7-ElevenFranchisees

5622

Candy Bouquet Candy Bouquet (AAFD Chapter) 485Cookies by Design The Cookies by Design

Franchisee Association (AAFDChapter)

179

Curves Curves Franchisee Association 6329Children’s Orchard The Children’s Orchard

Cooperative58a

Domino’s Domino’s Franchisee Association 4584Fitness Together Fitness Together Master

Franchisee Council401

Gold’s Gym Gold’s Gym FranchiseeAssociation

465

Hardee’s Independent Hardee’s FranchiseeAssociation

1224

Jackson Hewrtt Independent Council of JacksonHewitt Franchisees, Inc.

5778

KFC Association of Kentucy FriedChicken Franchisees

4387

Meineke Meineke Dealers Association 772Musak International Planned Music

Association60a

Pizza Hut International Pizza Hut FranchiseHolders Association

5084

Starwood Hotels Association of Starwood HotelsFranchisees and Owners

220b

Taco Bell Franchise Management AdvisoryCouncil

4279

Wendy’s Old Fashioned FranchiseeAssociation

4690b

Supers Motels Owners 8 Association 1887Sylvan Learning Sylvan Franchise Owners

Association500a

All figures obtained from www.entrepreneur.com unless otherwise noted.a Figures obtained from interviews.b

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ommunication devices through which the franchisor speakso its franchisees, and are typically seen as lacking sufficientuthority or power to demand change.1 Anchoring the other endf the continuum are groups of franchisees temporarily boundogether solely to pursue legal action against the franchisor.panning the middle of the continuum and at times contain-

ng elements of both extremes are IndFAs. These associationsay not be sanctioned or even recognized by the franchisor

nd many coexist and share members with litigation groups andranchisor controlled FACs operating within the same system.he governance of IndFAs is usually completely free of input

rom the franchisor and officers are typically elected from theembership of the IndFA or may include professionals hired

y the IndFA. This research focuses on associations that labelhemselves as IndFAs and when we refer to an association were referring to this type of group unless otherwise specified.

Methodology and data

Three sources of data were used in constructing this analy-is, secondary data available via mass media channels and fromssociation websites and literature, participant observation atranchisee association conferences, and unstructured interviewsith those with experience with franchisee associations. The

nvestigation began with an analysis of franchisee associationebsites, joining, engaging and reading franchisee web forums

nd attending regional franchising group events. These sourceslong with mass media articles, franchisee association newslet-ers and law articles about franchisee associations provided anowledge base prior to the first author’s immersion in the field.he first author participated in three unique franchisee asso-iation conferences. The first conference, spanning four days,as a national gathering of franchisee association leaders and

dvocates representing dozens of American franchise systems.wo subsequent conferences, spanning four days and five daysespectively, were specific annual conferences of two of theargest franchisee associations in the United States. Prior tohe conferences, the focal association’s newsletters and websitesere analyzed to provide a broad understanding of the structural

haracteristics of these associations and the key players withinhem. During the conferences, the first author attended dinners,wards ceremonies, board meetings, town hall meetings, fran-hisor presentations and social gatherings to engage franchiseesn their natural surroundings. In addition to the 34 recordednterviews described below, informal discussions with dozensf franchisees during said conferences helped to inform this
esearch. Field notes were taken and theoretical memos writteno illuminate key findings from the field and to isolate variablesf interest. The second author, though an academic, is a current,
1 A quote from franchisee.org the website for the AAFD, the leading advocacyroup for franchisee associations, states: “A franchisee association is an inde-endent organization of franchisees. It is distinguished from advisory councilsr other entities sponsored or funded by the franchisor. Some associations haveeen funded by the franchisor, but the resulting inhibition of independent actionn behalf of franchisee interests makes such organizations at best a hybrid, and atorst completely compromised in their ability to represent franchisee interests”.

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Figures estimated based on Franchise Times 2009 Top 200 Franchise Sys-ems.

ctive franchisee association board member in a large Americanranchise system. While data from the specific system in whichhe second author is involved was not used in this research, thatuthor’s role on an association board provided valuable insighthat aided in both the selection of interview subjects and in thenterpretation of the data.

Utilizing our knowledge base we purposively sampledPatton 2001) individuals with experience in 19 unique asso-iations in a range of systems in various stages of maturity andepresenting a wide variety of sectors (Table 1). Though inter-iews were unstructured, questions were based around severalain themes: descriptive detail of the association and its his-

ory including the individual’s participation with the system,embership within the association, and relationships between

ranchisees, between franchisee association and franchisor, and
etween franchisee and franchisor. This approach permittedn open dialogue between researcher and interviewee allowingnteresting avenues of insight to emerge. Most interviewees had
http://www.entrepreneur.com/

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xtensive history within the focal system with an average of 21ears (σ = 10) years of experience and collectively 719 years ofxperience with franchising. Interviewees included 16 formernd current association presidents/directors and ten former andurrent board members (see Appendix A for full list). Due tohe sensitive nature of the discussions all informants have beeniven aliases and data that would identify the informant has beenlightly modified.

Interviews averaging 53 min each were fully recorded andranscribed and field notes were written in-situ resulting in80 pages of single spaced text. Archival material includingpen letters to franchisors, material on association websites andranchisee newsletters resulted in approximately 800 pages ofublished text. Taking an inductive approach to theory develop-ent, our data were analyzed in an iterative fashion to discern

eoccurring patterns and themes. Researchers in the field of orga-izational behavior and sociology have used similar methodsithin the context of channels of distribution to engage in such

nquiry and theory development (Bradach 1997; Pratt 2000).reliminary open coding resulted in a set of codes and higherrder themes that were iteratively re-defined as new data wasollected and the authors discussed and reworked the data. Thisrocess occurred throughout data collection and themes wereevised to parsimoniously reflect new emerging patterns whileccommodating for conflicting data. Focused coding of the dataas done utilizing Atlas.ti,2 a well respected qualitative softwareackage (Kozinets 2002). A theoretical journal was used to eval-ate and incorporate extant literature to inform the interpretationf the data. Throughout this process regular discussions betweenhe two authors helped clarify inconsistencies in the analysishile allowing each author to reflect on their interpretation of theata. As each author brought a unique perspective, one as mem-er on a board, and the other experiencing associations in theeld firsthand, these discussions helped to acknowledge poten-

ial biases that each researcher brought to their interpretation ofhe data.

Findings

A scorpion needs to get across the river, and says to the frog,carry me across the river, and the frog says, you know, no,you’ll sting me and I’ll die. The Scorpion said, well no, oncewe get on the river, if I sting you, we’ll both die; I’ll drown. Sothe frog says, okay, and they get halfway across. The scorpionstings him and he says, why did you do that? He says, I’m ascorpion, it’s what I do. Well, the scorpion’s the franchisorand the frog’s the franchisee. – Colin

Colin, in recounting the parable above, also stated that hisssociation was blessed with a few board members that had
een through the “war” and therefore would always be suspi-ious of the franchisor. One such member, his legal counsel,nitiates new board members by telling them this parable even
2 Some archival material was not loaded into Atlas Ti as electronic copies ofext were unavailable – these data were coded by hand.

f Retailing 87 (3, 2011) 285–305 289

hough the relationship as it stands today between associationnd franchisor is highly collaborative. The franchisor in this caseas fully recognized the association, has active dialogue with itseaders and has even offered to write mandatory membership inhe association as a requirement in the franchise agreement.

The story above demonstrates the natural tensions betweenranchisee–franchisor cooperation and conflict that manifest in

franchisee association’s organizational identity. Franchiseessociations work to maintain solidarity among their member-hip by developing a distinct organizational identity separaterom that of the franchisor while at the same time work withhe franchisor to deliver instrumental benefits to their mem-ers. Association leaders repeatedly expressed the challenges inanaging these often conflicting tasks; being ever vigilant and

eady to do battle by reminding themselves that the franchisoroes not share their identity, while at the same time workingonstructively with the franchisor for the benefit of the sys-em. In the following sections we present our findings relatedo these dialectical identity processes and detail how franchiseessociations we studied work to manage them.

dentity (in)stability

One factor emerged as fundamental to the formation andontinuance of franchisee associations in the systems we stud-ed; the transitory nature of the franchisor corporate identityuxtaposed against the stability of franchisee ownership in theystem. We uncovered that corporate identity change on the partf the franchisor often acts as a catalyst for franchisee associa-ion formation while expectations of the franchisor’s continuednstability necessitate ongoing identity adaptation on the partf the association. Franchisee stability also plays an importantole. Low turnover provides a stable environment for developinghe relationships among group members that are necessary fortrong identity construction (Littler and Salaman 1984).

Of the 19 unique associations studied, members in 15 sys-ems pointed to changes in a franchisor’s corporate identity (i.e.,hanges in perceived central and distinctive goals and values ofhe franchisor) as critical to understanding the evolution and

aintenance of the association. Of those 15 systems, evidencerom nine highlight the shift in ownership from the founder of theranchise to new ownership as a critical transition, a fundamen-al change in the corporate identity of the franchisor. Transitionsuch as the loss of a founder or merger or acquisition have longeen recognized as critical junctures of identity change withinn organization’s identity lifecycle (Albert and Whetten 1985).s described by Tom, a 20-year franchisee and association boardember whose wife has also been a franchisee for the past 30

ears:

And just like in a family, you didn’t always agree with “dad(the founder),” but the belief was that he truly was looking outfor your best interests in the long term. . .you always believedhe was just going to take care of you. Dad’s always going to
be there, always going to do the right thing. That’s what youknow. This company (private equity firm) comes in. . . it’s adifferent world, and you’re not prepared for that. – Tom

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Even after the founder sells his interests to a third partyhe mere presence or tangential involvement of the founderrovides some stability to the corporate identity of the fran-hisor. Though they may not have direct control over theperations of the system, as long as these iconic founders aretill involved they provide a sense of security for franchiseeshat trust the system has retained continuity in its central valuesnd has the best interest of franchisees at heart. However, oncehe founder leaves the system for good, this source of secu-ity is lost. This evolution is described by George, a 34-yearranchisee:

In the end he (the founder) would always try to do whatwas right for people. And when the company was goin’through the very tough times he was very empathetic tothe franchise system, and really felt bad about it. So thatthe culture over the years stayed there as long as he wasaround. So when he was gone it really, really was different. –George

Thus, just as franchisees age and exit the system, foundersoo have a physical lifespan that leads to their termination aswners and leaders. However, unlike the franchisees in our dataho often transferred ownership of their individual shops to theext generation in their families, system founders rarely do so.nstead, iconic founders such as Colonel Saunders of KFC andames McLamore and David Edgerton of Burger King oftenell their system to a corporation or a private group of investors.he initial transition can be followed by a series of successiveales as demonstrated by KFC’s ownership history. KFC firsthanged hands in 1964 when the Colonel sold the companyo a private group of investors. Then between 1971 and 1997t changed ownership four additional times3. Long time fran-hisees in the KFC system have witnessed 15 different presidentsMurry 2009) while Burger King franchisees have witnessedimilar revolving corporate leadership with five different CEOserving within a seven year period in the 1980s (Lowman andarratt 2009). Franchisees who have witnessed these kinds ofhanges within their own systems expressed a sense of insecu-ity coming from the perceived instability of the franchisor’sorporate identity and highlighted these insecurities as fun-amental to the formation and functioning of their franchiseessociations.

Our data reveal that uncertainty also exists around howhanges in the identity of the franchisor might impact the rela-ionship between the franchisor and franchisee association itself.he relationship between franchisor and franchisee association

ypically is not institutionalized but rather depends to a greatxtent on the unique personal approach of the CEO or Presidentf the franchise system. Thus, the relationship between fran-hisee association and franchisor can change overnight withhe installation of a new corporate officer that is friendlier orore hostile to the organization. Roger, a 37-year franchisee,
hen asked how he would characterize the relationship between
ssociation and the franchisor describes such anxiety:

3 Source KFC.com.

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The only thing I can say is that it probably changes fromone president to the next. Some of them choose to work alittle bit more closely with the association. The one we havetoday is not a big proponent. . .We’ve had relationships withpresidents who have franchisees actively involved in what’sgoing on and then we have the other ones, like we have today,that just head on down the road and you find out after it’s beendone what’s been going on. So it creates anxiety especiallywhen things are desolate. – Roger

Such changes in leadership often require an association’sdentity to adapt in order to survive. If an association views itselfs a constant opponent of the franchisor and the franchisor’sorporate identity changes to embrace franchisees as partners, aailure to adapt can cause the association to dissolve due to lackf purpose. Likewise, if an association continues to define itselfs a cooperative partner of the franchisor when its membershipiews the franchisor as a threat, the association will be vieweds failing to protect franchisee rights. Its members will see it aso-opted by the franchisor and not worthy of their support.

In juxtaposition to the instability of the franchisor corporatedentity, franchisees in 14 of the 19 systems spoke of enduringr expected multi-generational commitments to the brand. Fran-hisees consistently noted that unlike corporate officers, theyad a significant portion of their personal wealth and livelihoodied up in the franchise. They had nowhere else to turn to if itailed while corporate officers could simply move on to otherompanies. Jason, a 12-year franchisee and regional associationresident, explains such differences:

So we always talk about the fact that many of these corporateguys will come in and they’ll make decisions; they’re notgonna be around in 3, 5, 10, 15 years. But look at my father-in-law; he’s celebrating his 43rd year. – Jason

The contrast between the enduring nature of franchisees whenompared to the perceived transience of system ownership andanagement is a fundamental concept in understanding the

unctioning of franchisee associations. Stability on the part ofranchisees provides the necessary environment to sustain a dis-inctive association identity that is continuous yet adaptive, andapable of resisting pressures towards static states of conflictnd cooperation. Stability provides a communal structure andhe shared moral responsibility necessary for developing strongn-group distinctiveness. Such distinctiveness is vital for main-aining group boundaries in light of collaborative work with theranchisor. As evidenced in our data, multi-generational fran-hisees have a vested interest in the long term health of theystem and are often highly attached to the brand and thereforeork to temper in-group/out-group bias when it threatens the

ong term viability of the system. Stability among franchiseeslso encourages an active participatory membership allowing forocial capital to develop that in turn encourages collective sup-ort for a leader’s attempt to reframe their association’s identityn light of changes in the franchisor’s corporate identity. Such
daptation of the association’s identity is crucial for its survivals shifts in the corporate identity of the franchisor threaten itsistinctiveness.

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anaging overly cooperative identity framing

When group members interact on a personal level and coop-rate individually with those from identified out-groups, thetrength of identification with one’s own group is diminishednd intergroup biases are reduced (Bettencourt et al. 1992;rewer 1988) allowing each side to see the other’s point of view.uch moves towards identity overlap can occur when a fran-hisee association’s members and the franchisor work togethern combined task forces that are tasked with working towardsonsensus on some set of issues. Patrick, a 29-year franchiseend association board member talks about such a cooperativeork environment:

I get to work with this new president closely, being on thiscommittee, I have a lot a confidence in him. I understand thecorporate mentality and what drives, what motivates them. Ithink we’re on a better track than what we’ve been in manyyears. – Patrick

While such a cooperative environment may increase indi-idual franchisees’ influence in the system, a state of identityverlap is problematic for the franchisee association as failureo maintain a clear boundary between franchisor and the fran-hisee association blurs the distinction between the categoriesf “us” and “them”. Decategorization is meaningful because theategorization process defining the association as “us” (i.e., then-group) and the franchisor as “them” (i.e., the out-group) isentral to the identification process (Gaertner et al. 2000). With-ut a clear distinction between the association and the franchisor,igilance is hard to maintain leaving franchisees vulnerable toossible franchisor opportunism. The fear of slipping into thisode and being surprised by sudden changes in the franchisor’s

olicies are what motivated the telling of the scorpion story toew association members.

Of the 14 franchisee associations that work cooperativelyith the franchisor, members in eight systems expressed chal-

enges in maintaining or affirming their independence andembers of 10 systems expressed challenges in maintainingembership rates in light of such cooperation. Over time contin-

ing cooperative behavior pushes the independent association’sdentity ever closer to overlapping that of the franchisor. Usingranchisee terminology, these associations are viewed as “drink-ng the Kool-Aid”, taking the side of the franchisor and blurringhe line between franchisor and franchisee association. FACsre often identified as these kinds of co-opted associations, withheir leaders often thought of as working more for the benefit ofhe franchisor than for the franchisees.

In reaction to fears of co-optation engendered by such collab-rative work environments, franchisee association leaders oftenork to reestablish lines of demarcation by defensively resist-

ng the pull towards a wholly cooperative relationship. Barry, aormer franchisee, who has worked in his franchise system for8 years and is now the director of the franchisee association,
escribes such an instance:
You have to have that distance to maintain that indepen-dence. I have to tell you that as I have worked with these

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guys (the corporate franchisor) I’ve found myself more thanone time, arguing their point. Arguing corporate’s point andthe board’s like whoa, whoa, whoa, whoa, you know, we’renot gonna do that. – Barry

In well established franchisee associations, we found thatssociation leaders create formal structures to help reaffirm theiristinctiveness from the franchisor. These structures often takehe form of free spaces away from the franchisor where fran-hisees can openly interact without fear of retribution whilestablishing unique traditions that re-affirm their separation fromhe franchisor. These spaces include closed meetings open onlyo the franchisees, password protected web forums that encour-ge open and lively debate among franchisees, annual confer-nces separate from the franchisor, and association run maga-ines. Research on social movements points to the importance ofhese free spaces, defined as separate physical and psychologicalpaces beyond the control of those in power, in developing dis-inctive oppositional identities (Evans and Boyte 1992; Pollettand Jasper 2001; Scott 1990). Franchisee-only events at regionalnd national conferences, web forums and franchisee newslet-ers can reinforce in-group/out-group distinctions when usedo remind members of the inherent adversarial nature of theranchisee-franchisor relationship. However, these spaces canlso provide collaborative framing opportunities. For exam-le, franchisors in some systems are invited guests at nationalnd regional franchisee run conferences, and stories highlight-ng collaborative efforts between franchisee associations andranchisors may also appear in franchisee newsletters. Perhapsore importantly, once established, free spaces provide a ready

latform for an association to collectively respond to changesn a franchisors’ identity quickly, efficiently and forcefully. Aewsletter’s editorial, an association’s president’s speech at aonference or an open letter to the franchisor communicatedhrough a website can often enable such adaptive framing.

The creation of free spaces often requires considerablenancial and organizational resources and the continued inde-endence of these spaces from the franchisor depends on aell funded association treasury. That independence is criticalecause these spaces are under continual risk of contaminationrom franchisor interference. Such a contamination is describedy Henry, a former franchisee association president who haseen with his system for 10 years:

But they (the franchisor) were so close that it smothered us. Sojust recently we called a meeting without corporate officersbeing part of it and our corporate office completely wiggedout about it. I explained that this is what we have to do. Wehave to be able to talk freely and candidly. I don’t have aproblem after the meeting either involving you or letting youknow what we talked about but I need the franchisees to becomfortable enough to just say how they feel. They can’t dothat with you there. – Henry

Another way to guard against identity overlap during times
f a collaborative work environment is the establishment ofar chests to fund future litigation against the franchisor. Thesear chests allow for rapid change from a cooperative to com-

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ative stance vis-à-vis the franchisor when change is viewedecessary by the association. Symbolically these war chestsork to highlight the perception that franchisor opportunism

s inevitable. During periods of cooperative behavior therefore,ar chests help to reiterate the in-group/out-group distinctions

nd maintain a certain level of threat awareness. Colin describesuch a threat:

We’ve got a strong association that is active and watchingregularly and is vigilant. Then as a franchisor, you’re gonnabe much less likely to try to pull a fast one, ‘cause you knowthe moment you do, we’re gonna jump on you. – Colin

The social capital of an association’s leaders, how these lead-rs are elected and appointed, and who they represent alsoelp to affirm the autonomy of an association. In all the wellstablished associations we studied, the evolution of the associ-tion eventually produced a freely elected body of leaders. Evenhough in some of these systems leadership may have startedy self appointment to facilitate its establishment, well estab-ished associations move inevitably toward some variation ofemocratic regional representation. Regularly occurring elec-ion cycles work to legitimize the organization’s leadership whilessuring their independence from the franchisor. Franchiseeeaders that are independently elected by a democratic processave significant social capital in the system. These individualsay be well respected long-term franchisees that are successful

perators of their franchise units and capable of working effec-ively with the franchisor or individuals who have a history ofrotecting the interests of franchisees by challenging the powerf the franchisor. Election cycles provide an avenue to reframehe identity of the organization, as newly elected leaders redefineheir relationship with the franchisor. A potentially combativessociation identity can change overnight with the installation ofewly elected association officers that are willing to work collab-ratively with the franchisor. Representative elections also reactynamically to changes in association composition as new fran-hisees enter and reshape the identity of the organization helpingo realign the organization’s identity with its constituents.

Sometimes franchisors push to consolidate an existing FACith an IndFA thus disrupting this political process. If the inde-endent association is absorbed into a FAC, it often comes withestrictions including non-disclosure agreements that work toeduce the ability of franchisee leaders to effectively managend communicate the association’s identity. For these reasonsur franchisee contacts repeatedly cautioned against actions thatlurred the boundary between “us” and “them”, even thoughhese actions would increase collaboration. Tony, a 15 year fran-hisee, describes the concerns about his franchisee associationerging with the FAC and points to the election process as

ritical in reaffirming its independence:

Most of the franchisees insist that we are to remain indepen-dent and the previous board members felt the same way. Yetthe former FAC board members say that the franchisor has
offered to give our association a significant amount of moneyto defray certain expenses and they think we should take it.Most franchisees and original board members seem to be of
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f Retailing 87 (3, 2011) 285–305

the opinion that we were self standing before this, and thereis no good reason to take the cash from the franchisor. Andonce you start taking money, it creates a conflict. . .While wetry to be as independent as we can, one thing that makes usless independent is that some of the board members came tothe board by a different route. Once we’ve gone through acouple of election cycles that part should work itself out, butthe thing that concerns me is the way those people think andwill shape the future while they are still in office. – Tony

Though clear boundaries between franchisee and franchisorre essential for the creation and maintenance of an association,n association’s existence also hinges on its ability to work coop-ratively with the franchisor. Therefore, the ability to deftly man-ge the identity divide by managing the potential conflict thatay arise from over exuberant in-group/out-group bias is also

ital for the long term survival of associations as we discuss next.

anaging overly combative identity framing

Many franchisee associations are initially formed specificallyo oppose the entity currently in control of the franchise sys-em – be it founder, private equity group, or publicly tradedompany. In fact some begin as ad hoc groups formed to fur-her litigation against that franchisor. Franchisees viewing theurrent franchisor as antithetical to their beliefs or self interestay form or join these associations to maximize their iden-

ity separation from the franchisor. At the individual level theiterature describes such cognitive separation, a sense of sepa-ateness, as disidentification (Elsbach and Bhattacharya 2001).uch disidentification involves categorizing groups as rivals ornemies; however it does not imply identification with a groupith an opposing meaning. You can therefore disidentify with

he franchisor without identifying with the franchisee associ-tion that opposes them. Lacking a strong core identity forhemselves, groups based on disidentification are defined exclu-ively by the force they oppose. Disidentification can be a strongniting incentive during times of distress or perceived threat (seetein 1976 for review), however after the conflict has passed (or

awsuit terminated) the group may collapse due to lack of itswn unique identity. A recurrent theme discussed among fran-hisee association leaders and advocates was the transience ofssociations that had built an identity around a static state ofonflict with the franchisor. Ultimately an association’s longerm survival must be based on franchisee identification withhe association not their disidentification with the franchisor.

While relying on disidentification may not be successful inhe long run, in the short run it is clear that associations benefitrom periods of combative relations with the franchisor. In 14 ofhe 19 associations we studied members, reported that conflictith the franchisor was a crucial step in the development of their

espective franchisee associations. Our sources also stated thaturing times of conflict membership in their groups increased,esulting in greater financial and operational capabilities. Per-
eived opportunistic acts by the franchisor often pushed formerlyeutral franchisees to join an association perhaps by acting as aatalyst for “unfreezing” identification (Ashforth 1998) with theranchisor. Disidentification with the franchisor, therefore, may

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ay the groundwork for the eventual establishment of a moreermanent franchisee association with its own distinctive iden-ity or act as a mechanism to galvanize support to reenergize thessociation. Thus, in the short term, periods of strong disidentifi-ation and conflict with the franchisor can be useful to franchiseessociations. As described in field notes taken at one franchiseeonference, board members may frame their identity as combat-ve to rally support and increase the power of the association inhallenging the franchisor:

As pieces of information are leaked to franchisees and thestory of the board and its disagreement with the franchisorunfolds, franchisee unity and disidentification with the fran-chisor is growing. Events and presentations build upon eachother in creating a sense of unity among franchisees cul-minating with the town hall meeting where franchisees areasked to donate to the cause to send a message to the fran-chisor. I am even tempted to stick my hand in my pocket to“fight the fight of our lives”. – Field Notes

Unfortunately, a static combative identity can quickly spiralut of control and threaten the operational efficiency of the sys-em. However, in much the same way a well funded treasury canupport an association’s identity in opposition to the franchisor,t can also support the association’s efforts to soften its combat-ve identity. The hiring of lawyers, PR firms and industry expertsan often quickly and credibly reframe the association’s identitys more cooperative. Many mature franchisee associations (e.g.,ominos, Pizza Hut, Meineke) hire professional non-franchiseeirectors who can play the role of boundary spanners (Aldrichnd Herker 1977) being supportive of franchisees but able toaintain a constructive collaborative dialogue with the fran-

hisor. Such officers or directors may be seen as having neutraldentities (Elsbach 1999), neither fully combative nor overly col-aborative. When the franchisor is acting in a perceived negativeashion toward the franchisees therefore, the association mayelp finance the fight but when the threat has been removed, itan also act constructively by channeling association resourcesoward professional conflict resolution.

To further prevent an association’s identity from becomingolely combative, association leaders sometimes work to side-ine those members seen as detrimental to the relationship andnstitute policies that prevent one rogue franchisee from shiftinghe group to either identity extreme. In associations with demo-ratic governance systems, this is often accomplished througherm limits or regularly occurring election cycles. Robert, a 26-ear franchisee and president of his regional association, iniscussing a highly vocal franchisee named Lennie, describesuch an issue:

Lennie is another vocal guy that’s very sharp and that def-initely has his opinion on things. I’d love for him to bepresident, because I think he’d be good, but he scares ourassociation people too much. So they don’t want him. . .Imean you can be vocal and strong you know, stand up for
it. But, what you have to do is kind of a thin line. You don’twant to alienate yourself from (the franchisor) so they won’ttalk to you at all. So it’s kind of a thin line that you have to,have to walk. – Robert
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Though some associations have online forums that allow forpen discussion about the system and expressions of disidenti-cation with the franchisor, franchisee association leaders ofteniew these as potentially destructive to the association’s rela-ionship with the franchisor. Jeffrey, a 17 year franchisee andoard member, describes such caution when dealing with openorums:

I can see that (an online forum) becoming kind of a bitchsession for somebody to get somethin’ off his chest and bevery negative. I think that’s somethin’ we’re gonna have tomonitor and watch. – Jeffrey

Uncensored forums usually exist outside the legitimateoundaries of the association and are often hosted by third par-ies that are not officially sanctioned by the association. Theseites accomplish the dual purposes of providing a forum for theostering of a distinctive organizational identity while allowinghe association to maintain its distance from communication that

ight be destructive to the delicate cooperative relationship itopes to maintain with the franchisor.

uilding a core identity

It is clear from our data that associations seek to estab-ish identities that are strong enough to allow them to adapto changes in their environment so that they can avoid beingtuck in overly cooperative or overly combative relationshipsith the franchisor. In the literature on unions, the stability of theorkforce and seniority of membership have been highlighted

s critical variables for developing relationships among workersecessary for solidarity and collective union action (Clawsonnd Fantasia 1983; Littler and Salaman 1984). Such stabilitynd seniority afford the group a rich repository of experiencesnd relationships with which to develop a continuous core iden-ity. Then, when they need to switch from identities that areooperative to combative or vice versa, they can do so withoutlienating their members. Evidence from 13 established associ-tions in our data set point to the importance of three repositoriesor establishing a distinct organizational identity; the founder,rand, and other franchisees. The most firmly established associ-tions in our data exhibit a strong central core of rituals, artifacts,nd traditions that they draw from one or more of these reposito-ies to develop and sustain a distinct organizational identity thatontributes to its adaptability. These highly successful associa-ions resemble communities and exhibit the established markersf community: consciousness of kind, shared rituals and tra-itions, and a clear sense of moral responsibility (Muniz and’Guinn 2001). Their identity is reproduced by their members

hrough the use of storytelling and shared traditions, enabling aonsciousness of kind or an awareness and identification withther members of the group to develop (McAlexander, Schouten,nd Koenig 2002; Muniz and O’Guinn 2001).

One source for developing a strong core is to adopt the
ounder as central to the meaning of the association even afterhe founder is no longer in control of the system. Such adoptionacilitates two key functions. First, it provides identity con-istency in contrast to perceived changes in system ownership

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nd/or management. Secondly, it affords associations a rich setf symbols and artifacts that are malleable. Given the insecurityccasioned by changes in the identity of the franchisor, the rolef the system founder in the mythology of these franchise sys-ems cannot be overstated. In eight of the franchise associations,ranchisees related the mythology of their systems by recall-ng an idealized founder and spoke of the good old days whenhe founder–franchisor cared for franchisees and looked out forhe long-term interest of the system. Even in tough economicimes these franchisees felt they could count on the founder toelp franchisees “muck through”. This characterization of theelationship was often in stark contrast to how franchisees char-cterized the current franchisor. The role of an iconic founderas often described as a father figure, with informants using

his family metaphor when speaking of past relationships in theranchise system:

And so (the founder) was ‘the dad.’ And he had this dream andthis belief, and he built the company. He really believed that ifhis franchisees were successful, then he would be successful.. . . It was a family. – Tom

Susan, a franchisee for the past 42 years and past presidentf the association, used the ideals of the franchise founder toxplain the strength of the association. She describes the associ-tion as a family, the symbolic archetype of community (Nisbet993). The family of franchisees, once personified in the sys-em through the founder, is now embodied in the franchiseessociation:

Now (the Founder) didn’t have any money. . . . in those dayspeople were very friendly and everything. They’d ask (theFounder) if he’d wanna stay with ‘em, and he’d love it, ‘causeotherwise he was sleeping in his car; he couldn’t afford amotel. And, so, he then became friends and family with allthese various people he was bringing into his family (TheFranchise). He always thought about it as his family (TheFranchise). . .We (the Association) carried on this family tra-dition. – Susan

Though the meanings associated with the franchise foundernd the brands they built are often closely intertwined, associ-tions also draw upon the brands themselves to construct theirdentity. Associations often appropriate the artifacts and ritualsssociated with the brand, becoming the legitimate keepers ofhe brand and its meanings. The brand name is almost alwayssed in naming the association unless blocked by the franchisorn grounds of copyright infringement (e.g., Toasted Sub Fran-hisee Association). If successful, an association’s perceptualppropriation of the brand and its meanings can provide legiti-acy to the association allowing access to the symbols, shared

raditions, and stories of the brand. The important point heres that the brand and the franchisor (i.e., owner and managerf the system), although legally linked, are not the same entity.t was clear from our data that perceptions that the franchisor
s failing to protect the brand or failing to be true to the brand
eanings can allow the association to emphasize its own directinkage to the brand and thus provide a distinctive identity forhe association.

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The third set of meanings that associations draw upon iserived from the franchisees themselves. Idolized franchiseesnd the values they uphold can provide powerful symbols ofn association’s identity. We found that such symbols are bestaintained in mature systems where franchisees pass on fran-

hise properties to family members that have grown up in thessociation, creating second and third generation franchisees.ranchisee associations, as enduring institutions within fran-hise systems, can provide a space for earlier generations toass the legacy and stories forward to future generations. Inuch systems older generations are venerated and their past rela-ions with the founder often afford them high status within theroup. In addition, franchisees that have stood up to the fran-hisor in the past serve as combative symbols for the associationo call upon when needed. Reference to these iconic franchiseesnd the social relationships among current franchisees therefore,oth provide meaning helpful in establishing the association’sdentity. Christopher who elaborates on the “feeling”, a moralesponsibility to help fellow franchisees, tells such a story:

“I mean guys would drive from one city to another to helpanother guy open his store. Didn’t know ‘em, didn’t have anyvested interest in ‘em, but they would just say, you know theyknew, hey, there’s a guy that’s gettin’ in the business, and, andlet’s go help him. So it’s kinda been always that relationshipof, of let’s go help. You know, if you’re in trouble, call, letme know what I can do to help; I’ll be there. . .there’ll be theguys right behind me supportin’ me any way they can, anyway that I need ‘em to help. And, and that’s kinda how ourassociation has grown.” – Christopher

It was clear from our data, however, that these elements ofn association’s identity so central in maintaining a core are dif-cult to sustain. Turnover among franchise properties or rapidxpansion in the system results in an influx of new franchiseeshat fail to have history with the brand, founder and association.uch an influx may result in multiple subcultures of franchisees

hat vie for political power, creating divisions among the asso-iation. Such is described in an excerpt from field notes from anssociation conference.

This association is highly fragmented, the cultural coreis being assaulted by new franchisees that have not beenindoctrinated. . .as a result those that previously had culturalcapital in the system no longer hold power as a new set offranchisees enter and are perceived by older franchisees aswilling to toe the line for the opportunity for expansion in thesystem. – Field Notes

As long time franchisees exit the system, they siphonway the heritage of the group. Institutionalizing the artifacts,raditions, and rituals within the association therefore is critical.nnual national and regional conferences are fundamental

o such a process. The proximity afforded by such retreatsnables the enactment of rites and the use of artifacts in a way
hat establishes and reaffirms the distinctive and consistentdentity of the organization (Trice and Beyer 1993). Use ofuch identity laden symbols also helps demarcate in-grouput-group distinctions (Elsbach 2003; Pratt and Rafaeli 1997).

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n association gatherings we observed, founders were immor-alized in scholarships, through auctions of their possessions,nd by naming achievement awards in their honor. In realityany founders had contentious relations with their franchisees;

owever in revising the past, these associations are able toap into a rich set of symbols relating to the brand and toecast stories about the founder to help build solidarity, oftenn opposition to the current franchisor. As highlighted byioia, Schultz, and Corley (2000), such revisionist history

Loftus 1980) often results in a mythology of the franchiseystem and of the association. If the mythology is compelling,s new franchisees enter the system they interact with longime members and are socialized into this interpretation of theast and the relationship between association and the founder.ormer franchisees, too, are honored in golf tournaments andy awards in their names, facilitating discussions about thereatness of past franchisees in their battles with the franchisor.ssociation publications are also used as media for reaffirming

he identity of the group and acting as efficient communicatorsf identity by highlighting those franchisees that uphold thealues of the group. Such salient and attractive identity markerselp promote behaviors that reaffirm the association’s identitynd transfer that identity to incoming franchisee members.

Associations that can utilize the set of traditions, rituals andrtifacts embedded in the founder, brand, and fellow franchiseesre particularly able to respond to changes in franchisor corpo-ate identity. The symbols, rituals and artifacts help build a strongore identity that distinguishes the association and provides ithe capability to shift its identity subtly towards a cooperative orombative identity frame as needed. During times of coopera-ion, symbols of an association’s struggle against the franchisorre utilized to draw a clear boundary between the franchiseessociation and franchisor. Rituals enacted during annual gath-
rings help highlight the group’s solidarity. Myth-like storiesevolving around the brand, founder and former franchiseesrovide malleable meaning that associations can adapt to meet
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f Retailing 87 (3, 2011) 285–305 295

urrent identity needs. When managed effectively, these sym-ols, rituals and artifacts can provide powerful support for theevelopment of an association’s distinctive and adaptive identity.

Identity adaptation in franchise associations

Our findings suggest that organizational identity and its adap-ation are integral factors in understanding a critical structure inranchise systems, the franchisee association. One of the primaryeasons collectives fail is that the identity of the organization failso line up with the perceived identity of its members (see Benfordnd Snow 2000 for review). Members begin to question whetherhe group still represents who they are and what they stand forn light of changes in the environment. A reframing of an orga-ization’s identity in light of shifts in the environment is thusrucial for the sustenance of organizations (Benford and Snow000; Brown and Eisenhardt 1997; Gioia, Schultz, and Corley000). In order to survive in the long run, franchisee associa-ions must be viewed by their members as having an identityhat is capable of being both cooperative and combative in itselationship to the franchisor. The association must be seen asble to work effectively with the franchisor while at the sameime able to aggressively protect the interests of franchisees ashe situation dictates.

The proffered answer, therefore, to our research questionegarding the way that franchisee associations manage thenherent tension between conflict and cooperation in franchiseystems is conceptualized in Fig. 1, and reflects the centralole of changes in the franchisor’s corporate identity and fran-hisee association identity adaptation. The left side of the figureefers to the key factor in the requirement for identity adapta-ion, the instability of the franchisor’s corporate identity. If the
ranchisor’s identity were stable and predictable, the franchiseessociation could simply assume a static cooperative or combat-ve identity. The franchisee association’s environment howevers inherently unstable. The right side of the figure refers to the
entity adaptation.

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Table 2Adaptive capability.

Financial resources Democratic governance “Free spaces” Rituals, traditions, artifacts Franchisee stability

Managing overly cooperativeidentity framing

A well funded association canreaffirm boundaries andcredibly reiteratein-group/out-groupdistinctions though the use of“War Chests” that highlightthe inevitability of franchisoropportunism.

Term limits or regularlyoccurring election cyclesassist in tempering staticstates of cooperative identityframing by reaffirming theautonomy of the association.

Closed meetings, webforums, annual conferences,and association runmagazines provideopportunities to affirm anassociation’s independenceand to develop a distinctiveoppositional identity.

The enactment of rituals andtraditions and use of symbolsestablishes and reaffirms thedistinctive identity of theorganization whiledemarcating in-groupout-group distinctions.

Stability on the part of thefranchisees fosters communalrelations among franchiseesthat affirm their uniquenesswhen juxtaposed againstfranchisor corporate identityinstability.

Managing Overly CombativeIdentity Framing

Financial resources allow forthe use of professionals thatcan act as boundary spannersthat can temper staticcombative identity states.

Term limits or regularlyoccurring election cyclesassist in tempering staticstates of combative identityby sidelining those seen asdetrimental to thefranchisee–franchisorrelationship.

Uncensored free spacesusually exist outside thelegitimate boundaries of theassociation and sanctionedfree spaces may allow forcooperative identity framingby including the franchisor inthe events.

An adaptable mythology ofthe association and franchisesystem can be used to temperstatic combative identitystates by reminding membersof the importance ofcooperative relations for thecontinued existence of thesystem.

Longtime members have avested interest in the longterm viability of the systemthus tempering staticcombative identity states.

Building the Core Financial independenceaffords the availability of freespaces that provideopportunities to reaffirm adistinctive identity whilefostering relationships amongfranchisees.

Election processes affirm thesocial capital and legitimacyof leaders that can crediblyreframe the association’sidentity.

Free spaces allow franchiseesto openly interact withoutfear of retribution whilefacilitating the establishmentand transfer of uniquetraditions, rituals and symbolsthat re-affirm their separationfrom the franchisor.

Appropriating the meaning ofthe brand, founder, andfranchisees provides a rich setof rituals, traditions andartifacts that support theformation of a community.

A stable franchisee baseincluding multi-generationalfranchisees aid in the transferand institutionalization ofdistinctive rituals, traditionsand artifacts that help indevelopment of continuousidentity.

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relationships can exist within franchise systems and that thesecommunities can form around strong attachments to a brand,a founder or fellow franchisees. Though significant empirical

4 Oxenfeldt and Kelly’s (1968) assumption of stability of the identity of thefranchisor can best be recognized by contrasting it with the lack of stability


ssociation’s ability to adapt. The association’s adaptive capabil-ty is derived from financial resources, democratic governance,ree spaces, rituals, traditions and artifacts, and franchisee stabil-ty. These sources of adaptive capability permit the creation of andentity for the association distinct enough to survive the changesn its environment occasioned by the franchisor’s instability.

It is important to note several things about Fig. 1. First, itescribes a successful franchisee association, one that is ableo sustain itself over time. Associations unable to adapt wille caught in a static state of cooperation or conflict and willither cease to represent the interests of franchisees or becomerrelevant once the source of conflict is resolved. Second, thegure assumes the instability of the franchisor’s corporate

dentity as reflected in our findings. Changes in franchisorwnership or management will produce changes in its dealingsith the franchisees. It should be noted however that we haveefined the franchisor’s corporate identity as being viewed fromutside. Franchisee perceptions of instability in the franchisor’sdentity reflect actual and anticipated change but can also beffected by the intentional framing of the franchisee associationr through careful image management by the franchisor. Thetory of the scorpion represents an intentional framing of theranchisor’s identity instability on the part of the leaders of theranchisee association.

Third, the suggested conceptualization is dynamic in theense that adaptive capabilities possessed and continuously nur-ured by the franchisee association provide the potential for thessociation to redefine itself in response to or in anticipation ofhanges in the franchisor’s corporate identity. The association’sbility to adapt enables it to deliver both the system efficien-ies derived from cooperation with the franchisor and protectionrom harmful franchisor actions to franchisees, should the needrise. The focus of successful franchisee associations, there-ore, is on developing the financial capability to maintain itsndependence, creating and maintaining free spaces that permitnfettered communication, acquiring the rituals, traditions andrtifacts that establish the basis for the feeling of community,nd maintaining a sense of continuity within the association thatan be juxtaposed with the perceived lack of stability of the fran-hisor (see Table 2). These capabilities create an identity for thessociation that is at the same time clear and distinct but alsoapable of reframing its relationship with the franchisor whenequired. It is an identity that is perceived by its members as anrganization whose core values and goals center on representinghe collective interests of franchisees within a highly dynamicnvironment. Franchisee associations that are able to maintainuch an identity enjoy the continuing commitment of their mem-ers and productive working relationships with the franchisor.

Finally, while the conceptualization is agnostic with respecto the relative difficulty of changing toward a more cooperativer more combative identity frame, there was at least a sugges-ion in the data that change toward a more combative posture

ight be easier. It is much easier for franchisors to destroy trust
han to earn it. The general level of suspicion that exists within
any systems seems to support this idea. A franchisor’s reputa-ion for behavior destructive to the interests of its franchisees isery hard to change. On the other hand, a single salient oppor-

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unistic move on the part of a franchisor, theretofore vieweds cooperative, can have an abrupt effect on its corporate iden-ity. Once a change in the franchisor’s identity is perceived, its also likely that some of the sources of adaptive capability

ay support a franchisee association’s identity change in oneirection more than another. For example, financial resourcesnd free spaces may better support adaptation from coopera-ive to combative, while democratic governance and franchiseetability may be more suited to adaptation from combative toooperative.

Discussion

To fully understand franchising, it is important to understandhe kinds of structures and institutions that play a significant rolen the life of franchisees. In this paper we have argued that oneuch structure, the independent franchisee association, survivesn a dynamically changing environment by carefully adaptingts identity. The enduring nature of many of these organizationsnd their important role in the functioning of their franchiseystems questions two implicit assumptions of franchise the-ry. First, the assumption that franchisees are lone economicnd/or psychological actors that interact exclusively in a directyadic relationship with the franchisor is countered in our data.ather we find that franchisee associations are rich reposito-

ies of inter-franchisee relationships. The financial incentivesnd personality traits that have been characterized as the fullet of influences on the franchisee do not do justice to the com-lexity of social forces in play. Second, is the assumption ofermanence on the part of the franchisor.4 A recurring fran-hisee narrative views the franchisor as a perpetually unstablend unpredictable exchange partner while longtime franchiseesnd the associations they constitute view themselves as legiti-ate stewards of the brand. In light of our findings, the potential

xists for a research program designed to uncover the full set ofultural, symbolic and social aspects embedded in franchising.uch a research program might well lead to increases in the pre-ictive power of traditional economic models while improvinganagement practice by enhancing standard incentive structures

nd governance mechanisms. To encourage such scholarshipe offer three potentially fruitful avenues for future franchising

esearch: (1) communal relationships (2) organizational identity,nd (3) franchisee–franchisor identification.

ommunal relations

Our data are consistent with the idea that true communal

ssociated with the identity of the owner of a particular franchise unit. Thewnership of particular franchises are seen as changing among franchisees andetween franchisee and franchisor for a variety of reasons while the franchisordentity remains fixed in this analysis.

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ork on communities and subcultures within the B2C con-ext exists (McAlexander, Schouten, and Koenig 2002; Muniznd O’Guinn 2001; Muniz and Schau 2005; Schouten andcAlexander 1995) work on communities within the B2B con-

ext has been scant. Research on franchising has tended to ignorehe construct of community, even though descriptions of theranchise system as a family are commonplace. Unlike com-unal groups that form within the confined boundaries of therm or among consumers who share a common brand affiliation,

he unique tensions that exist within the franchise relationshiprovide an interesting setting to study the influence of commu-al relations on its members. Dunkin’ Donuts faced this kindf challenge in the 1980s when new franchisees who shared aommon ethnic background looked to each other instead of theranchisor to determine their response to company initiativesKaufmann 1988). Franchisee based communities may also acts rich repositories of institutional knowledge. The rituals andraditions embodied in these organizations can be very usefuln the creation, dissemination, and maintenance of firm specificntelligence. In addition, the normative pressures to conform toommunity standards are particularly relevant in light of themportance of uniformity in the success of franchising. Ethno-raphic work may shed light on the process of acculturating newembers or achieving social capital in such groups as well as the

actors involved in the inclusion or exclusion of the franchisorithin the community.

rganizational identity

Concepts of brand identity (Aaker 1996; Keller 1993) andorporate identity have garnered significant interest amongarketing scholars examining B2C relationships. Though orga-

izational identity and its influence on franchise systemanagement have not been considered important, our data

uggests that many franchisors would be well served to care-ully manage this aspect of the franchise relationship. Researchxploring how some franchisors are successful in managingheir identity during changes in leadership would provide criticalnsight into this potentially important process. Systems such as

cDonalds5 or Chick-fil-A6 have purposefully managed theirorporate identity by picking their senior leadership from within
nd by ensuring future generations of family leaders. Contrasthis with the current CEOs of Dominos, Burger King, Block-uster, and 7-Eleven, for example, where none had worked forhe systems before being named to leadership positions in the
5 McDonalds has had a history of hiring from within with recent leadership inhe corporation having long term relationships with the brand. The current CEO,im Skinner, has worked 38 years with the company and past CEOs Bell (30ears), Cautalupo (30 years), and Greenberg (21 years) had all worked significantortions of their lives with the company. In addition, the company strives hardo maintain its connection to the ideals of its founder Ray Kroc (Harris, 2009).

6 Chick-fil-A founder Truett Cathy remains CEO and chairman but hasroomed his sons Dan and Donald from childhood to assume their current senioreadership positions in the company (Scott 2006).

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ompany7. Developing leadership from within by promotinghose with institutional knowledge and long term operationalxperience with the system, however, is difficult and may bespecially difficult for systems without company owned stores.lural form organizations (i.e., systems with a mix of fran-hised and company owned stores) have the benefit of a depthf management experience at the store level providing poten-ial for a life career with the brand. Future work examininghe potential of different system structures in facilitating iden-ity stability in light of changes in ownership or managementould shed light on this crucial juncture in the lifecycle of a

ranchisor.

ranchisee–franchisor identification

As mentioned, marketing practitioners have recognized theotential benefits of promoting strong consumer identificationy maintaining distinct attractive identities for their brands, com-anies and products. Identification is a “sense of oneness” withn organization where there is an emphasis on the collectivever the individual and one’s own identity overlaps with therganization’s identity. Such identification is clearly presentn a system like Chick-fil-A that selects operators with sim-lar values to the founder and intensively socializes them tonternalize the brand and closely identify with franchisor man-gement (Berry 2000; Reichheld 2001). Much like relationalorms facilitate the investment in firm specific assets (Heidend John 1992) or control opportunism (Brown, Dev, and Lee000) such identification between franchisee and franchisor mayave salutary benefits including pro social behavior (O’Reillynd Chatman 1986) and loyalty (Adler and Adler 1988). Fran-hising researchers, however, have not examined the potentiallyeneficial outcomes afforded by high levels of organizationaldentification on the part of the franchisee. Instead, franchisingesearch has focused exclusively on governance through eco-omic incentives via the carrot of residual profits and the stickf loss of ex post rents (Coughlan et al. 2006, p. 527) that aressumed to solve the inherent problems of the principle–agentelationship. The degree to which franchisee identification withhe franchisor might serve to align their interests and thus impactranchisee behavior regarding such familiar issues as free ridingr acceptance of franchisor initiatives are interesting researchuestions with important consequences for the management ofuch systems.

While opening up significant avenues for future inquiry,ike other discovery-orientated research (Wells 1993), the studyeported here has several limitations. Although the richness andepth of our experiences in the field provided significant insightnto characteristics vital to understanding the formation and

aintenance of franchisee associations, the sample was limited.
urther work in additional systems using a variety of methodsould be valuable in providing even greater variation across theifferent identity characteristics and permit an examination of
7 As described by the executive bios contained on their respective companyebsites.

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heir relative importance to different subgroups of franchisees.typology of different identity types (i.e., communal, conser-

ative, progressive) and their differential impact on franchiseedentification would add greatly to our understanding of theranchisee–franchisor relationship.

Second, our unit of analysis was the organization (i.e., fran-hise association) rather than the individual franchisee. Theres great potential for work looking at individual franchisees andheir identification with the franchisor, brand, founder and fran-hisee based groups and the relationships that exist betweenhese foci. The study of identification has the potential to uncoverntecedents of important constructs such as intergroup biasnd stereotyping leading to well established constructs such asonflict and trust. The study of multiple foci of identificationay include questions such as: Can members of an association

trongly identify with a franchisee association while simultane-usly identifying with the franchisor? Are these two types ofdentification mutually exclusive?

Third, the majority of our interviewees were highly involvedn their associations as long time franchisees with years of expe-ience in the franchise system. Additional fieldwork is neededo explore other types of franchisees and their role in shap-ng these associations. Prior work in franchising has, for the

ost part, taken a one-dimensional approach to categorizingranchisees. Multi-unit operators, for example, have historicallyeen defined as owning more than one unit. Our fieldworkeveals the potential for a much more nuanced social approach toategorization.

Lastly, our viewpoint was that of the franchisee association.nderstanding franchisors’ perspectives on their relationshipsith franchisee associations and how they work to manage

ranchisees in such organizations would provide added insight.nderstanding how some franchisors successfully negotiate the

ransition from founder to outside ownership while maintain-ng legitimacy as brand stewards would be another significantontribution to practice.

Conclusion

This study represents the first step in a research programimed at exploring the franchisee’s relationship with the fran-hisor as embedded in a broader social structure. As revealedn our data, franchisees are not single economic actors sim-ly reacting to economic incentive mechanisms but are socialctors embedded within a complex set of interpersonal rela-ionships. These inter-franchisee relationships have importantmplications for the management of franchise systems and forranchise research. The formalization of these relationships intoersistent structures such as franchisee associations implies thathere are additional entities within franchising that are in a posi-ion to interpret and frame franchisor incentives and monitoringehavior for their franchisee members. It also implies that in
ature systems collective action may well be more likely than
ndividual action when reacting to franchisor initiatives. Thesere realities that should be accounted for in our models of fran-hising.

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A second finding is also worth reiterating. A maturing USranchise industry has resulted in an environment where anncreasing number of franchisees work in franchise systemshat are owned by large corporations or private equity groupsith high levels of turnover among management. Many of theulti-generational franchisees we encountered in these systems

erceive their relationship with the brand as more enduring thanhose of the current owner or management team. As systemrowth comes increasingly from within, this perception willnly intensify. This narrative requires a reassessment of stan-ard assumptions regarding the internal functioning of franchiseystems and the actual roles, power and incentives of franchisornd franchisees within those systems.

Acknowledgements

This research was funded by a grant from the Boston Univer-ity School of Management Doctoral Program.

Authors wish to thank three anonymous reviewers for theirxceptionally helpful comments and the many franchisees thathared their stories to make this work possible.

Appendix A. List of interviewees

ame Role Yrs exp.

ngie Board Member 7arry Association Director 18harles Former Board Member 29hristopher Former Association President 32olin Association President 25onnie Former Association President 10anny Former President of Franchise system 35eborah Association President 7red Association Director 35eorge Association Member 34enry Former Association President 10

ackie Board Member 3ames Association President 35ason Regional Association President 12effrey Board Member 17ennifer Franchisee Non-Member 7ohn Franchise Law year/Association Council 25atrick Board Member 29ichard Association President 28obert Regional Association President 26oger Former Beard Member 37yan Beard Member 14am Association President 17arah Association Member 17teve Beard Member 16usan Former Association President 42ania Association Member 11om Beard Member 20ony Beard Member 15

ack Association President 16

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F Franchisee stability

W We have a lot a franchisees that are hitting 50 years now with thebrand. You know, it’s, it’s. . .. not uncommon to, to see, you know,25, 30, 35, 40 year franchisees, and, and those are what we refer toas legacy. – Jason

Franchisees feel they have greater concern about the long termhealth of the business than the corporate guy who’s passingthrough. . .And if you looked at the XXX system, there’s very, verylittle turnover in that system. I mean the people that own it, own itfor a long, long time. And there are people with probably hundredsof millions of dollars invested as opposed to a corporate guy who’scollecting a paycheck. And that causes a very legitimate concern onthe part of franchisees. You know, how do I know you have as muchin this and as much concern for the future as I do? – Danny

We have some families that have owned franchises for 50 or moreyears. It is usually a very closed group that buys, for example thetypical purchaser of a XXX franchise is another XXX franchisee oris a salesman or someone from the XXX community at large a sona nephew someone with familiarity and hooks into the system. . .

They are often family businesses and these people have a long termview where they are building a business not just for themselves andfor their current livelihood but to pass onto their children, hencethey tend to be I think a little more conservative then the parentcompany.

Interviewer: How about the corporation? Has leadership in thatbeen relatively stable?

No, there have been significant changes in the ownership of it, andover the last couple of years there have been revolving presidentsand there has been significant changes in the ownership of thecorporation over the years. . .During my tenure (32 years) thelongest any CEO has been there is 5 years.” – Walter

I wanted something to give to my kids. I mean down the road. Myson would love to come in and take over my store. We’ve talkedabout that his whole life. It’s not probably gonna happen, becausewe won’t be around. That’s the sad part. I bought into something asa long term investment, and this has been my career. . .This issomething I can pass down to my kids. . .You know, this is a familybusiness. It, it’s sad that it’s probably gonna go away. It makes mesad. – Tania


Appendix B.

.1. Supplemental data

ranchisor instability

hen he came in (New Franchisor), he made it very clear that hisphilosophy was if you are planning on staying in the business fora long time, you are doing the wrong thing, you should be gettingin, building up your business and selling it. That was hisphilosophy. he was after a quick profit. The problem is you can’ tstart these stores and expect them to grow overnight, that’s whathe tried to force. – Zack

Those guys who are staffing key positions you know thecorporate side of the business. They’re looking to stake the nextrung up the ladder and they’re doing things that are going toperpetuate that and it’s not necessarily the best thing for thebrand or business. . ..it’s unfortunate because too often they takethe short term approach to a long term problem. And thefranchisees. . .we’re in it for the long haul unfortunately, in mostcases we are. And we will take the longer term perspectives onthings. Franchisor is more short term oriented and wants to seethose immediate results. . . Every three or four years you have anew person (manager) coming in and changing direction andchanging marketing strategy and changing numbers soconsequently they get into the discounting program and yourquality diminishes. – Roger

The relationship (between the association and franchisor) reallydepends on the management of the company, who the chiefexecutive is and how they manage the relationship more thananything else. We went through a rough period during a timewhen we were making money the company brought in a newpresident. . .who ran the company like an MBA spreadsheet. –Wayne

I saw 8 presidents, and probably (Laugh) 10 or 11 VPs ofmarketing. So, part of the argument was guys, the decisions youall are making now, we have to live with. And, and I could veryhonestly look at the guy over the board, and said, you knowwhat, you’re probably not gonna be here next year; I’m stillgonna be here. – Christopher

I was a franchisee for a franchisor that was publicly traded andso the franchisees had 20 year licenses. But the CEO of thecompany had to report to the street every 90 days. Well it’s veryhard to be in sync with your goals and objectives when one’sworried about surviving for 20 years and the other one’s worriedabout what he’s going to tell the street in 90 days. So a lot ofshort term, short sighted, sometimes reckless decisions are made
in order to prop up sales, prop up profit. – Fred
Who knows who’s gonna be sitting up there on the stage as theexecutive team 4 years from now. So, no, we don’t wanna signthis thing and just, you know, carte blanche here you go. –Charles

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M Managing cooperative identity

W But now we’re in a different place, and I hope we never get back to theplace we’re enemies, but if we do, we’re much more prepared to, tofight than we ever would a been back then. I mean it took a lot to getorganized, get people on board, and now we’ve got an organization inplace that would be much more effective. And I think that becomes adeterrent. We’ve got a strong association that is active and watchingregularly and is vigilant, then as a franchisor, you’re gonna be muchless likely to try to pull a fast one, ‘cause you know the moment youdo, we’re gonna jump on you, and we’re gonna publicize and we’regonna let people know. – Colin

A

The company seeing that it was going to happen anyhow, jumped inand offered to lend money to get it organized. . ..but then they got a seaton the board of directors of the association which meant basically thatthey were inside. It was impossible at that point to discuss anythingconfidential between franchisees. – Wayne

A

It has been there’s that feeling that the association is in the back pocketof the franchisor. We still have not really had a large issue that we’vebeen on opposing sides. . . I think part of our problems as anassociation is that we haven’t gone into battle with the franchisor sothat hasn’t really pulled us together as a group of all owners. It’s likewell everything is going fine so why should we bother joining theassociation. I think that may be a problem even though it’s nice to havesuch a good working relationship with the franchisor it hasn’t reallypulled us together with a common cause.- Deborah

So you truly are independent and so you can fund yourself. You can putsome money aside. It’s always nice to be able to show the franchisorthat you have 300,000 dollars put aside not because you expectanything bad to come up. But at least them know that if somethingreally bad comes up you can fund a fight for a while. – Fred

I

O8A was formed in the spring of 2007, in an attempt to unite manyloyal Super 8 franchisees that were concerned with issues in the Super8 franchise system. We felt that the O8A was a necessary alternative tothe Super 8 Franchise Advisory Board, since it did not adequatelyrepresent the majority of Super 8 franchisees and was made up of alimited number of franchisees, which served unlimited terms and werehand-picked by Super 8 itself. – Excerpt from letter sent to JohnValletta, president of Super 8 Motels, Inc., Jay Patel, head of theOwners 8 Association

B

More important than anything else in the franchise association world isa huge defense fund. And I look at it like this: nuclear warheads – we

T



anaging combative identity

hat I’m rebuilding into the website is a way for there to be aproductive conversation area and then an area to fix the complaint.So for those people that are feeling pretty good about things theydon’t need to read all the bitch moaning and groaning.” – Fred

VANTI was born from National Coalition dreams and franchiseeeditor Joe Saraceno’s undying beliefs and determined efforts. In thesecond issue he cautioned the need for balance: “Actions whichwould tend to destroy the system make no more sense than buildinga roof over your head, while at the same time tearing down the wallsand foundation designed to support it.” – (excerpt from history ofNational Coalition of 7 Eleven Franchisees websitewww.ncasef.com)

lthough we almost appear to be adversarial, you know, because wewanna protect franchisee rights and everything, I think more andmore we look at everything as XXX Corporate are our partners.That’s the approach that I know we take on our executive board, thatthey’re our partners, because we’re all heading in the samedirection. . .Now there was a time when (franchisee association) wasreally perceived by (Corporate) as being very adversarial. And, I’venever been one to wanna get involved in that. I, you know, I knowwho buttered my bread. . .You know, so it’s a fine line. You know,you wanna protect your contract, you wanna protect your rights. But,you know, sometimes being arrogant or adversarial is not the way toaccomplish that, and I don’t like litigation.” – Jason

’m like, “Oh my god! This would just be perfect! This is a guy (newdirector) that’s just very organized, very well respected by thefranchisees and by (the franchisor). Like I said, he was a golden boyas far as they (the franchisor) were concerned. So we thought, “Well,this is good. He’ll get the respect he deserves. He can go in and talkto xxx one-on-one, CEO to CEO. This is perfect.” – Tom

ut there are a couple of Yahoo lists of (franchise) owners and, that isvery active and very busy, and lots of people, lots a goodconversation going on there. And, lots of mutual help and lots ofsupporting each other through the complaints and the frustrations.Sometimes the information from there gets through to the board,although the board tends to be resistant toward anything that comesfrom that group. – Jackie

he relationship that used to be nonexistent between DFA (IndFA) andDPLLC (corporate) is now open, respectful and starting to producepositive outcomes for our members. I know it is early on in our new
have them, and I hope to god we never have to use them.” – Tomrelationship. . .but I am optimistic that we can continue the positiveprogress with the open communication we now have in place. – KenPeebles CEO Dominos Franchisee Association – The VoiceVolume XII Issue IV
http://www.ncasef.com/

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uilding the core

eeping the legacy of Dave Thomas alive is very important to OFFA.Dave embodied the virtue of humility which reverberated throughoutthe entire system. At our November 6th meeting in Dublin, Ohio, wetook another step designed to keep Dave’s fundamental values alivein the system. The Board of Directors along with membershipworked to revise the OFFA Mission Statement to purposely imbueour independent association of franchisees with the heritage of DaveThomas. The OFFA Mission Statement now reads: Our mission is togive Wendy’s franchisees an independent, credible voice in theWendy’s system for the purpose of preserving the values DaveThomas instilled in us and enhancing our members’ investment andprofitability. In addition, our Vision Statement now says: “We are thesteward’s of Dave’s legacy.” Wendy’s is about the passion we allhave for this system and the family of Wendy’s franchisees. We missthe culture that Dave instilled in the organization and we miss theprofitability. – Joe Johal President OFFA (Wendy’s IndFA) OFFANewletter – Volume 1 Number 1

One of the things (the founder) was really strong on was, wasmaintaining really strong franchise relations. There was a lot arespect, and you know mutual respect, and it was felt out there. AndI was on the corporate side at that time. And it was part of our job, itwas, you know, you know, you know to make sure you, thefranchisees are payin’ us 4%, make sure we give ‘em the service thatthey need. – George

t was the feeling the (founder) had. The feeling he exuded. And, weall. . . developed this, there’s a word I’m tryin’ to think of, this. . .uh. . . pattern, you know. . . it’s (the association) is closer than I am tomost any family really. So, it, it’s, and I attribute it to (the founders)uniqueness. It’s a culture, that’s the word I was tryin’ to think of . . .

there’s a culture there that. . . I. . . don’t think you’ll find with anyother franchise group. – Susan

e (the founder) had stepped away from the company for a while; hestepped back in and said, “Look,” you know, “my franchisees arehaving a really rough time. We’re all in this together.” His motto waskind of, “Pull on your boots – we’re all going to muck through this.He made it so that no one flew first class, including himself. Youknow, he drove a – I think it’s a 1970 Suburban around town, a, youknow, beat-up – you know, just a very down-to-earth man. Themoney wasn’t really what he was there for. So he came back into thecompany, and the company kind of rallied back together. – Tom

Appendix C. Coding guide

Code family: Expressions of identity: Expressions of asso-iation identity.

Id with Brand: Indications that the associations identity isbuilt around brand meanings.◦ Discussions of the brand and its meanings◦ Discussions of brand stewardship/maintaining the brand

for future generations◦ Using the brand name/image and meanings in association

literature and communicationsId with Founder: Indications that the associations identity is
built around the founder.◦ Discussions of the founder and his beliefs◦ Storytelling about the founder and their interactions with
the association and its members

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Building the core

IMAGINE TAKING A U.S. HISTORY COURSE TAUGHT BY THEMEN AND WOMEN WHO ACTUALLY MADE THE HISTORY,people like George Washington, Abraham Lincoln, Amelia Earhart,Franklin Roosevelt and Martin Luther King. That’s more or less whattranspired when a panel of KFC franchisee forefathers (andoneforemother) delivered a two-hour history lesson at theAKFCFannual meeting in Las Vegas in 2005, only instead of U.S.history, the subject was the history of the AKFCF. . . Recallingphilosopher George Santayana who said, “those who do not rememberthe past are condemned to repeat it” Schlutz said in his introductoryremarks, “The AKFCF has a rich history that will be a critical key toour future. Preserving our history is the key to our future success.” –AKFCF Quarterly – Summer 2009 (Special Anniversary Edition)

In recognizing the accomplishments of the system the current presidentof the system recognizes the contribution of franchisees to the systemusing the following phrases “We are (the brand),” A key theme of thepresident’s presentation is the idea of family and the idea that (thefounder) is head of the this household. As with other families there istension between change and keeping the heritage of the brand andfounder exemplified in statements such as “the family is having toughtimes” and asking “what would (the founder) do?”. . .They bring boardmembers up on stage and the lights dim low as the board members facethe screen where the association creed is displayed and is played overthe loud speakers. – Field Notes

For those of us who were privileged to work with BURGER KING’sfounding father, Jim McLamor, you knew that he and his partner, DavidEdgerton, always respected franchisees as independent business ownersand proud stewards of a proud brand. . .I think it’s important for us toremember our heritage as we strive to build a better brand. . .On behalfof your NFA officers, directors and members, I believe that franchiseeswill continue to be the same voice of reason and responsible stewardsof our brand. We need to remain diligent as ‘Keepers of the Flame’ aswe continue to move our brand forward. William A Harloe –Chairman NFA (Burger King IndFA) – Flame Issue 1 2009

The, you know, I, I don’t think there’s a, a franchisee that doesn’t havethe highest and utmost respect for (the founder). For his philosophy,and for what he did. You know, when we have meetings andeverything, we always honor (the founder). – Jason

◦ Using the founders name/image and meanings in associa-tion literature and communications

Id with Franchisees: Indications that the associations identityis built around franchisees.◦ Discussion of association history (founders, visionaries,

inaugural presidents)◦ Discussions regarding key milestones (first gathering, bat-

tles) and the franchisees involved◦ Use of past franchisee names in award ceremonies, gather-

ings and scholarshipsDis Id with Franchisor: Indications that the associationsidentity is built around disidentification with franchisor.◦ Describing the franchisor as enemy◦ Describing the mission of the association as fighting the

franchisor◦ Highlighting the franchisor as different then the association

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Code Family: Identity Stability: Expressions related to theelative stability/instability of franchisee/franchisor.

Stable Franchisee: Expressions of franchisee stability toinclude:◦ Long term franchisee commitment to the brand◦ Franchisees as multi-generational family businesses◦ Long term relations among franchisees and the associationStable Franchisor: Expressions of franchisor stability toinclude:◦ Founder involvement in the system◦ Stability in franchisor management◦ Stability in franchisor ownership◦ Stability in franchisor policies towards franchisees/

association◦ Long term relations between franchisee and

franchisorUnstable Franchisee: Expressions of franchisee instability toinclude:◦ Inflows of new franchisees/outflows of old◦ Frequent changes in franchisee association leadership (not

term based)◦ Changes in franchisee compositionUnstable Franchisor: Expressions of franchisor instability toinclude:◦ Changes in franchisor management◦ Changes in system ownership◦ Changes in franchisor policy towards franchisee/franchisee

association◦ Perceived future changes of franchisor identity

Code Family: Identity Management: Structural charac-eristics of an association that work to manage the identity of therganization. To include leadership structure, political process,nteractions with the franchisor/management, communicationsith franchisees and franchisee gatherings.

Managing Combative Identity: Characteristics related tomanaging combative identity.◦ Franchisee leadership composition (former franchisor

employee, non-franchisee professional director, hiring ofoutside mediator)

◦ Expressions by leadership of working together for commongoal

◦ Expressions of controlling dissent (controlling web forums,sidelining troublemakers)

◦ Changes in leadership to improve relationship with fran-chisor

Managing Cooperative Identity: Characteristics related tomanaging cooperative identity.◦ Democratic election processes◦ Maintaining separation from the franchisor (cogni-

tive/physical)/“A fine line”
◦ War Chests◦ Expressions of future litigation and potential conflict with
franchisor◦ Communications with franchisees indicated transparency

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◦ Regional and national franchisee only gatherings◦ Franchisee run newsletters/web forums

Code Family: Core Elements: Evidence of fundamentallements of core identity. Including symbols, traditions, history,nd rituals embodied in the association.

Symbols/Artifacts: Use of symbols/artifacts such as those ofthe brand, founder and historical franchisees in associationgatherings and communications.Traditions: Evidence of the enactment of traditions in fran-chise gatherings and communications. To include annualawards, sporting events and presentations. Support of par-ticular charities related to the brand or the association.History: Evidence of storytelling surrounding the brand, asso-ciation, and members. Celebration of historical figures andevents in the system to include “wars” with the franchisor,milestones for the association and brand.Rituals: Evidence of the performance of symbolically richscripted performances surrounding the brand and associa-tion.

Family Code: Franchisee Association Descriptions:escriptions of the association as family, community or

esource.

Family: Description of the association as family.◦ Association members described as being part of a family

members◦ Association members described as brotherhood/sisterhood◦ Founders described as patriarchs or matriarchsCommunity: Description of association as community.◦ Consciousness of kind◦ Moral responsibility◦ Shared rituals and traditions◦ Evidence of in-group/out-group distinction.Resource: Description of association as resource.◦ Focus on economic benefit/cost of membership◦ Expressions of getting your money’s worth

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Identity in Franchise Systems: The Role of Franchisee Associations

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