Understanding Franchisee Performance: The Role of Personal and Contextual Resources

Abstract

This study examined central propositions of conservation of resources theory in a unique work context, specifically, the associations of franchisee personal and contextual resources with franchisee performance. Data were collected from 1570 Australian franchisees from 35 different franchise networks, with franchisee financial performance and franchise citizenship rated by the franchisor executives responsible for supervising these franchisees. Franchisee proactivity, optimism, family support, and perceived organizational support were positively associated with financial performance. Franchisee affective commitment, family support, and perceived organizational support were positively associated with franchise citizenship. Moderation analyses further revealed that, at higher levels of family support, there was a positive relationship between franchisee optimism and franchisee citizenship. In addition, multilevel analyses showed that low levels of aggregated organizational support (i.e., lower means at the franchise network level) nullified the positive association of franchisee proactivity with financial performance. The findings provide valuable insights into the personal and contextual resources that are linked to performance in the context of franchising, yielding practical implications for how franchisors select, develop, and support franchisees. We apply propositions of conservation of resources theory to a unique work context and demonstrate that franchisee personal and contextual resources are associated with franchisee citizenship and financial performance.