From Strategy to Storefront: CSR and Brand Competitiveness in Franchise Networks

Abstract

We investigate the relationship between corporate social responsibility (CSR) and brand competitiveness in franchising. Our paper demonstrates the challenges of adopting CSR programs in franchise networks as franchisees are independent entrepreneurs whose activities are governed by franchise contracts. We measure CSR on two dimensions: proactive CSR—franchisor's strategy, and partner preference—selection of franchisees with proven CSR commitment. Grounded in the brand co-creation concept, we crowdsource the brand competitiveness data from an anonymous crowd of customers—active experiencers of the brand and use traditional survey methodology to collect brand data from the franchisors—original brand creators. The franchisor survey had 65 usable responses, with data collected from senior managers of franchise organizations in Austria. In the crowdsourced survey, each brand received a different number of assessments from min 87 to max 238, with an average of 142 assessments per brand. The results of cluster and regression analyses suggest that CSR positively influences franchise firms' brand competitiveness.