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The antecedents and consequences of low franchisee satisfaction and its effect on retention: an exploration of a critical issue through the lens of Urie Bronfenbrenner's ecological systems theory

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The antecedents and consequences of low franchisee satisfaction and its effect on retention: an exploration of a critical issue through the lens of Urie Bronfenbrenner's ecological systems theory

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Content The Antecedents and Consequences of Low Franchisee Satisfaction and Its Effect on
Retention: An Exploration of a Critical Issue Through the Lens of Urie Bronfenbrenner’s
Ecological Systems Theory
Timothy David Clegg II
Rossier School of Education
University of Southern California
A dissertation submitted to the faculty
in partial fulfillment of the requirements for the degree of
Doctor of Education
May 2024

© Copyright by Timothy D. Clegg II 2024
All Rights Reserved

The Committee for Timothy D. Clegg II certifies the approval of this Dissertation
Courtney Malloy
Ruby Daniels
Patricia Tobey, Committee Chair
Rossier School of Education
University of Southern California
2024

iv
Abstract
This study investigated the reasons that franchisees may become dissatisfied with the operation
of a franchised business model and whether outside influences impacted their decision-making
process when deciding to remain or depart from their business. Former franchisees (N = 10) were
selected for participation in a semi-structured interview protocol where they were asked 12
questions, which allowed them to answer in a lived experience storytelling manner. High
instances of influence, at varying degrees, were uncovered in the interview data collection
process, including that of subculture, franchisor, and family. Also evident in the coded data was
the impact of the legal process of franchising and franchisee autonomy. Given the decline of
franchise business operations since 2020, more research is needed to better understand the
impact that a franchisee’s ecological system has on decision making, satisfaction, and retention.
Keywords: franchise, satisfaction, retention, influence, Bronfenbrenner, autonomy

v
Dedication
To Kas, Grayson, Harper, Finnegan, and Madora. All the best things in my life have happened
later. Never forget that it is never too late, and never give up!

vi
Acknowledgments
I am extremely grateful for Dr. Patricia Tobey, who stepped into the mentorship role of
dissertation chairperson when my previous one took a position at another university just before
my proposal defense. Thank you for your guidance, encouragement, patience, and feedback. I
would also like to express my deepest gratitude to Dr. Ruby Daniels for your academic
professionalism and leadership that you have extended to me not only during the dissertation
process but as a professor at the University of Oklahoma. Dr. Daniels, I am so grateful that you
chose to see me through to the end! Special thanks should also go to Dr. Courtney Malloy for
joining me midway through this journey and Dr. Guadalupe Montano for her excellent editing
skills.
This dissertation would not have been possible without the support of my USC friends. I
am so grateful to all my classmates and Cohort 18 members, especially Dan Foley, Dan Luna,
Hector Cabrerra, and Cory Hanson. Thank you for the calls, texts, and Zoom chats that kept me
going over the years and always kept it fun and full of never quit determination. We did it!
I would like to acknowledge the patience and sacrifice of my wife, Kas. Thank you for
lovingly supporting me throughout my academic journey. I love you! Special thank you to my
children, Grayson, Harper, Finnegan, and Madora. Daddy’s a doctor now! And special
recognition to my mom, Rita, and my aunt, Marcia; aka Sweetie. You were my biggest
cheerleaders! Thank you.
Lastly, this degree completion is in the loving memory of my father, Timothy D. Clegg
(1948–2011). Dad, you took me to my first USC football game when I was just a young boy, but
the memory is forever etched on my heart. How incredibly proud this accomplishment would
have made you. Your son is a Trojan! I miss you desperately.

vii
Table of Contents
Abstract.......................................................................................................................................... iv
Dedication....................................................................................................................................... v
Acknowledgments.......................................................................................................................... vi
List of Tables ................................................................................................................................. ix
List of Figures................................................................................................................................. x
Chapter One: Overview of the Study.............................................................................................. 1
Importance of Solving the Problem.................................................................................... 1
Stakeholder Organization, Mission, and Goals................................................................... 2
Research Questions............................................................................................................. 2
Overview of Theoretical Framework and Methodology .................................................... 3
Definition of Frequent Terms ............................................................................................. 3
Organization of the Dissertation ......................................................................................... 5
Chapter Two: Review of the Literature .......................................................................................... 6
Definition of Franchising.................................................................................................... 7
History of Franchising ........................................................................................................ 7
Why Franchise? ................................................................................................................ 10
Franchisee Satisfaction ..................................................................................................... 11
Franchising Law................................................................................................................ 21
Conflict ............................................................................................................................. 22
The Effect of COVID-19 on Franchising ......................................................................... 24
Assumed Causes for Dissatisfaction................................................................................. 25
Bronfenbrenner’s Ecological Systems Conceptual Framework ....................................... 25
Summary........................................................................................................................... 31
Chapter Three: Methodology........................................................................................................ 41

viii
Research Questions........................................................................................................... 41
Overview of Design .......................................................................................................... 41
Participants........................................................................................................................ 44
Instrumentation ................................................................................................................. 45
Data Collection Procedures............................................................................................... 46
Data Analysis.................................................................................................................... 47
Limitations and Delimitations........................................................................................... 49
Chapter Four: Findings................................................................................................................. 51
Participants........................................................................................................................ 51
Findings for Research Question 1..................................................................................... 55
Findings for Research Question 2..................................................................................... 65
Summary of Findings........................................................................................................ 69
Chapter Five: Discussion and Recommendations......................................................................... 71
Overview of the Study ...................................................................................................... 71
Discussion of Findings...................................................................................................... 72
Findings for Research Question 1..................................................................................... 72
Findings for Research Question 2..................................................................................... 74
Implications of the Study.................................................................................................. 76
Practice Recommendations............................................................................................... 76
Conclusion ........................................................................................................................ 80
References..................................................................................................................................... 82
Appendix A: Information Sheet for Exempt Research................................................................. 94
Appendix B: Interview Protocol ................................................................................................... 96
Appendix C: Qualifying Survey Questions .................................................................................. 99

ix
List of Tables
Table 1: Summary of Participants’ Demographics (N = 10) 52
Table A1: Interview Protocol and Qualifying Survey Questions 97
Appendix C: Qualifying Survey Questions 99

x
List of Figures
Figure 1: Bioecological Model for Development 27
Figure 2: Bronfenbrenner’s Ecological Systems Theory 32

1
Chapter One: Overview of the Study
Research shows that franchise organizations conduct over 17% of all U.S. retail sales,
and 25% of the U.S. workforce are derivatives of franchises (Kalargyrou et al., 2018).
Franchised organizations, however, only experience an 80% retention rate during a franchisee’s
initial 5-year term. This study addressed the macro problem of franchisees’ satisfaction in the
for-profit business sector and its impact on performance. The problem must be addressed
because franchise organizations experience an attrition rate of 20% nationally (Adeiza et al.,
2017). Members of franchise systems report that relationships, education and training
accessibility, and overall happiness with the brand are more important than financial success
(King et al., 2013). Therefore, retention and satisfaction are low if the organization does not offer
plentiful educational opportunities and creates interpersonal relationships with franchisors
(Fenwick & Strombom, 1998; Kalargyrou et al., 2018). The goal of addressing this macro
problem was to improve franchisors’ retention levels and future brand growth.
Importance of Solving the Problem
Solving the franchising industry’s retention problem is important for many reasons. There
are direct links between franchisees’ satisfaction, education, background, and their relationship
with the franchisor. The franchisor’s ability to prevent franchisees’ dissatisfaction is challenging
and has many factors, including lack of capital, fledgling support from the franchisor, and lack of
adequate research during the discovery time allotted (Combs et al., 2011; Frazer & Winzar,
2005). According to Fenwick and Strombom (1998), properly vetting potential franchisees from
the onset reduces the likelihood of turnover. This vetting significantly reduces turnover and the
risk of separation and forming a competing concept (Fenwick & Strombom, 1998). Conversely,
franchisees must also conduct due diligence when selecting a franchise opportunity to ensure

2
their highest likelihood of satisfaction. Multiple researchers suggest that franchisors who
increase communication, trust, educational opportunities, and interpersonal relationship-building
improve retention strategies in their business models (Adeiza et al., 2017; Kalargyrou et al.,
2018; Morrison, 1997).
For this study, I assumed that (a) the interviewee was entirely open and honest in their
participation and thoughtful answering of the interview questions, (b) the information garnered
could be applied to any franchised business industry, and (c) the data would be applied in the
creation of programmatic business practice solutions to increase satisfaction for future
franchisees.
Stakeholder Organization, Mission, and Goals
On a micro level, the stakeholder of study for this dissertation is FFI, which has been
assigned as a pseudonym to maintain anonymity. The data gleaned will benefit the organization
in retaining and creating more satisfied franchise owners. At a macro level, any franchised
organization may utilize the information collected through interviews and identify commonalities
in the results. The owners of any franchised business organization may utilize this study’s results
to improve their franchisees’ satisfaction and increase the intentionality of renewals in their
system.
Research Questions
The purpose of this study was to address the problem of franchisee satisfaction and how
it relates to retention. Additionally, the research provides possible solutions that franchisors can
implement to increase the likelihood of retention. Two research questions guided this study:
1. How do influential personal and social groups inform a franchisee’s decision to leave
a franchise?

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2. How do the franchise organization’s policies and regulations affect/influence a
franchisee’s intent to stay?
Overview of Theoretical Framework and Methodology
I utilized an adaptation of Bronfenbrenner’s ecological systems theory framework to
guide this study. The ecological systems theory framework examines the social constructs that an
individual navigates that ultimately influence their decisions in life and business.
Bronfenbrenner’s theory provides a complete approach to the understanding of human
development. The theory highlights the roles of environmental factors that mold an individual’s
development, how these factors intertwine to influence the individual’s growth, development,
and decision-making factors, and how these factors can change over time. The theory is
grounded in the idea that the relationship of five ecological systems shapes the individual’s
development. The systems are the microsystem, mesosystem, exosystem, macrosystem, and
chronosystem.
By using Bronfenbrenner’s ecological systems theory, I sought to identify causes for low
franchisee satisfaction and the different systems of influence that lower retention opportunities
for the FFI. The study’s results reflect effective ways to communicate alternate opportunities to
franchisees who are considering leaving, resulting in their retention. Ultimately, the hope was
that increasing franchisee satisfaction would increase retention, enhance franchisee lifecycle,
improve performance, and ensure franchise location growth for FFI.
Definition of Frequent Terms
Brand: An identifying mark, recognizable as a product or company name, that
distinguishes itself from a competitor.

4
Communication: The process of exchanging information through interpersonal,
conversational, telephone, or digital means.
Conflict: The act of being in opposition to each other in a value, idea, or opinion.
Entrepreneur: A person who has taken on significant financial risk to create and develop
a company, product innovation, or business system.
Franchise agreement (FA): A legally binding contract between a franchisor and
franchisee that defines the rights and responsibilities of both parties.
Franchise disclosure document (FDD): A legal document required by the Federal Trade
Commission (FTC) that discloses the franchising process, financial representations of the
franchisor, and other due diligence items paramount to a potential franchisee when making a
significant investment into a business.
Franchise: A license to sell, promote, or market a product, system, or service utilizing a
brand’s name within a prescribed market or territory
Franchisee: A person or company that is granted rights or permissions to do business
under the franchisor’s name and financially gains from it.
Franchisor: The established business that licenses others to sell, promote, or distribute
products or services under their trade name and utilizes proprietary items, trademarks, and
goodwill for a fee.
Goodwill: An intangible asset, such as trademark and registration, that has a significant
monetary value to the franchisor.
Intrapreneur: A managerial term to define someone who promotes, markets, or
distributes a product of a business that they did not create.

5
Proprietary: Items owned by a franchise and not attainable by other organizations, such
as recipes.
Registration state: One of 13 states with additional requirements for franchising outside
federal franchise guidelines. These states are California, Connecticut, Hawaii, Illinois,
Wisconsin, Indiana, Maryland, Michigan, New York, North Dakota, Rhode Island, Virginia, and
Washington.
Organization of the Dissertation
The organization of this dissertation uses the five-chapter format. Chapter One outlined
the problem statement and the importance of addressing and solving the problem. This chapter
also provided an overview of the organization, the stakeholders, the guiding research questions,
methodology, assumptions, and the definition of key terms. Chapter Two is a review of current
literature on franchisee satisfaction and retention. This chapter will address the history of
franchising, the reasons franchisees are satisfied or dissatisfied, their backgrounds and
demographics, issues in franchising law, and franchisee-franchisor conflict. Finally, this chapter
will introduce the methodology that will inform this study: Bronfenbrenner’s ecological systems
theory. Chapter Three will discuss the ecological systems framework and the instruments of data
collection utilized in this study. This chapter will also explore the validity and reliability of the
collected information. It presents the plan for analyzing the data. Chapters Four and Five will
present the study’s results, discuss and analyze the results, present conclusions and limitations,
and provide a summary of possible solutions.

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Chapter Two: Review of the Literature
This chapter addresses the macro problem of the satisfaction of franchisees within
franchise systems in the for-profit business sector and its impact on performance. The problem is
important to address because franchise organizations experience an attrition rate of 20 percent
nationally (Adeiza et al., 2017). Members of franchise systems report that relationships,
education and training accessibility, and overall happiness with the brand are more important
than financial success (King et al., 2013). Franchisee retention and satisfaction are difficult
unless the organization offers high educational opportunities and creates interpersonal
relationships with franchisors (Fenwick & Strombom, 1998; Kalargyrou et al., 2018). Research
shows that a franchise organization conducts over 17% of all United States retail sales, and 25%
of the U.S. workforce are derivatives of franchises (Kalargyrou et al., 2018). Addressing this
macro problem will impact franchisors’ ability to experience greater retention and future brand
growth.
In reviewing relevant literature on franchisee retention, four themes emerged from the
process. These themes are a franchisee’s professional background, interpersonal relationships
with the franchisor, the franchisee’s preferences for high levels of communication with the
franchisor, and franchisee-franchisor conflict. While the literature presented in this paper
navigates a variety of franchising problems, this review focuses on applying the literature to the
problem that franchisors experience in retaining franchisees by improving franchisee satisfaction
in their business system. Increased levels of franchisee satisfaction, in turn, lead to higher levels
of franchise agreement renewals.
This chapter will review the various groups that influence a franchisee’s behavior and
decision making that lies outside of the franchise system. Next, we will explore the role of the

7
franchisor and its ability to navigate outside influence on the franchisee. Finally, the chapter will
conclude by introducing the conceptual model used in the construction of this study. Utilizing
Bronfenbrenner’s ecological systems conceptual framework, this study will identify influential
groups that impact franchisee decision making.
Definition of Franchising
Franchising is the sharing of a business concept or model for growth, market dominance,
and brand recognition. Franchisees are allowed resources, including business models, marketing
materials, and proprietary items for the resale or distribution of goods or services for a fee or
percentage of sales due to the franchisor (Kostecka, 1987). The benefits to the franchisee are that
there is a proven business model that is replicable and increases the opportunity for business
success. The benefit for the franchisor is that they can increase their growth plan exponentially
by relying on the capital that franchisees place into the business model, thus lowering a
significant measure of risk. Ultimately, the franchisor reaps the reward of benefiting from
growth, expansion, and brand recognition, which allows them to sell more franchises and
territory locations (Aliouche & Schlentrich, 2009).
History of Franchising
There is some debate about the beginning of franchising in the United States. One
account credits Isaac Singer and his efforts to capitalize on the distribution dominance of his
sewing machines in the 1850s (Dant et al., 2011). Singer developed a franchise model that
allowed other licensees to service his sewing machines if they lived outside of a territory that
proved too far a distance to travel and provided timely and consistent service (Thomsen, 2020).
Canadian-born Martha Matilda Harper (1857–1850) was a former servant turned
entrepreneur. During her time as a handmaid to a wealthy doctor, she was charged with

8
grooming responsibilities. It was during this time that Harper developed her own line of tonics
and shampoos to use on her clients. Investing her life savings of $360 into her concept, Harper
established her first salon and experienced great success. Harper wanted to share her lifechanging experience by extending opportunities to women who had a similar background to hers
through the establishment of Harper Method Salons partnerships (Rosenburg International
Franchise Center, 2022; Thomsen, 2020). Harper Salons grew to over 500 locations throughout
North America, and many credit her legacy to the creation of the social franchising movement
(Rosenburg International Franchise Center, 2022).
In 1898, General Motors of Detroit, Michigan, sold its first franchise dealership to
William Metzger (IFA, 2022; Seid, 2018; Thomsen, 2020). Previously, the automotive industry,
through massive growth during the post-industrial revolution timeframe, had been dependent on
utilizing other businesses’ real estate to sell their automobiles (IFA, 2022). Henry Ford, for
example, utilized pharmacies to advertise and sell his Ford automobiles (IFA, 2022).
Leading the franchising charge into the 20th century, Coca-Cola realized the need to
lower distribution and material costs and began franchising to outside beverage bottlers (IFA,
2022). In 1901, Coca-Cola began shipping its heavily protected recipe syrups to independent
bottling companies to increase production and mass distribution (Seid, 2018; Thomsen, 2020).
This franchising system is still utilized today and is why Coke is a worldwide household name.
The mid-1900s experienced a popularity explosion of franchising models with the birth
of hundreds of franchise models throughout the United States. Unfortunately, with the soaring
popularity of non-regulated business models, unfair practices were in abundance and went
unchecked (Gandhi, 2014; Thomsen, 2020). This wild-west frontier of franchising and exploitive
business arrangements led to the creation of the International Franchise Association (IFA), the

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overseeing body for franchising, in 1967 (Seid, 2018; Thomsen, 2020). Later, in 1979, the U.S.
federal government established regulations and legal guidelines for franchising through the
Federal Trade Commission (FTC; Tifford, 1981). The FTC continues to oversee all franchise
relations and is regarded as the legal body of franchising with regulatory requirements,
mandatory reporting, and federal and state registration for all businesses that wish to operate as a
franchise (Tifford, 1981).
As of 2022, the state of franchising is very strong. According to the IFA (2022), there are
over 2,500 franchise opportunities to choose from. There are more than 733,600 individual
franchise locations from these 2,500 franchisors. Franchising represents more than 3% of the
U.S. gross domestic product (GDP) and growing (IFA, 2022; Seid, 2018; Thomsen, 2020).
Although the COVID-19 pandemic produced some challenges in 2020 and 2021, franchised
businesses showed resiliency and continued to thrive and grow throughout challenging times.
Many restaurants posted significant gains throughout the pandemic and continue to add locations
to their franchise business (Klein, 2023). The IFA (2022) reports that there was a 7% overall
increase in franchise location sales in the restaurant category, which increased business to prepandemic numbers.
Restaurants are, by far, the industry leaders in the franchise marketplace (IFA, 2022).
Approximately 30% to 40% of all U.S.-based restaurants belong to a franchise organization
(Combs et al., 2011). Restaurant brands such as McDonald’s, Burger King, Wendy’s, and
Dunkin rely heavily on franchisees to control a specific territory to keep competitors from taking
a market share of a similarly offered product (Combs et al., 2011; Dant et al., 2011; Harstad,
1994). Since its founding in 1940, McDonald’s has grown to over 38,000 locations in over 100
countries, of which over 93% are owned and operated by independent business owners or

10
franchisees (McDonald’s, 2019). Today, U.S. franchising employs more than 18 million people
and accounts for over $2 trillion of the economic output, equating to over 40% of the entire U.S.
retail sector (Dant et al., 2011).
Why Franchise?
The franchising of businesses is an option that can increase growth, brand recognition
awareness, and proof of concept. Many entrepreneurs find franchised business models appealing
because there is less personal risk associated with joining an already-established brand versus a
complete, ground-up business venture (Adeiza et al., 2017; Aliouche & Schlentrich, 2009).
Baucus et al. (1996) also suggests that franchising is a smart move for potential business owners
because it provides a system, name recognition, negotiated rates for supplies, faster entry to the
marketplace, and a reduced risk factor. Aliouche and Schlentrich (2009) also claim that franchise
businesses experience a superior level of economic and financial performance compared to nonfranchised business models.
There is a significant financial investment associated with the franchising of a business
model and a significant amount of time. Upon acceptance, a franchisee will pay a franchise fee
or a one-time payment to the franchisor. The franchisee will also be responsible for ongoing
royalties, or a pre-determined percentage of sales, to the franchisor (Zachary et al., 2011).
Outside of payments directly to the franchisor, a franchisee may be responsible for acquiring real
estate for lease or for sale, the buildout and infill of that property, fixtures, furniture, and
equipment (FF&E) (Goldberg, 2021). The franchisee may also be required to invest in marketing
campaigns, training fees, store remodels, and continued education (Goldberg, 2021). All
requirements vary with each opportunity, and all financial obligations would be outlined in the
organization’s franchise disclosure document (FDD; IFA, 2022).

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Once an individual has chosen to invest in a franchise model business, the challenges are
abundant for both the franchisee and the franchisor. The franchisee will experience moments of
added stress and uncertainty as well as moments of extreme highs and accomplishment. The
franchisor will take a supportive role as the franchisee goes through a myriad of emotional
transitions. It is during this critical time that a franchisee’s satisfaction level and the development
of trust with the franchisor is the most mailable (Chiou et al., 2004).
Franchisee Satisfaction
Franchisee satisfaction is integral to franchise growth. King et al. (2013) implied that it is
the franchisor’s responsibility to continually develop the franchisee into a brand champion to
increase the chances of retaining the franchisee for multiple renewal timeframes. King et al.
(2013) also suggest that franchisee happiness is measurable and manipulatable. Franchisors must
intentionally build high levels of trust with their franchisees to obtain satisfaction levels that
extend to tangible actions, such as growth and renewal intentions (Grace et al., 2016). When a
franchisee’s satisfaction level is low, not only can this negatively impact their unit performance,
but it may also lead to an early termination of the franchise agreement (FA; Frazer et al., 2007;
Frazer & Winzar, 2005; López-Bayón & López-Fernández, 2016; López-Fernández & LópezBayón, 2018). The relationship bonds between franchisees and franchisors rely on a foundation
of trust, high levels of communication, and an understanding of the organizational vision and
mission (Kotter, 2012).
Many factors exist in the franchise model that present opportunities for franchisee
dissatisfaction. Some of these factors may include unrealistic expectations, lack of support,
inability to follow the rules set forth by the FA, and poor communication strategies. Often,
franchisees are attracted to the franchise due to the success that they have seen others obtain.

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When a franchisee does not generate the same level of success as others do, they may feel let
down by their efforts or jealous of the success that other operators have obtained. Nathan (2011)
states that heightened and unrealized expectations in franchising are the main contributors to
franchisee dissatisfaction and lead to conflict with the franchisor.
Several topics have emerged within the literature as noteworthy as they relate to
franchisee satisfaction. These topics include communication, relationships, autonomy,
franchising law, conflict, and the background and experience of franchisees. Each topic is
dissected in the following sections.
Communication
Open lines of communication within franchise systems are critical to maintaining high
levels of franchisee satisfaction. Internal communication comes in many forms, from email and
phone calls to one-on-one interpersonal communications. A survey conducted by Chiou and
Yang (2004) of convenience store franchisees concluded that one-on-one communications with
the franchisor increased satisfaction levels more than any other singular factor. High-touch
communication builds trust and increases brand satisfaction (Chiou et al., 2004; Chiou & Yang,
2004). Current research calls for franchisors to develop channels of communication that address
franchisee needs and knowledge-sharing processes that will increase satisfaction, compliance,
and increased opportunities for success (K. Lee, 2017).
Some franchisees have identified apprehension in communicating with the franchisor.
The hesitation to share challenges parallels a lack of trust in the franchisor, knowledge, and
culture fit (Okoroafor, 2014). These communication barriers represent a significant trust issue.
This lack of trust can cause a franchisee not to be hesitant in opening up about issues that may be
affecting franchise unit performance for fear of chastisement from the franchisor (Chiou et al.,

13
2004; Chiou & Yang, 2004). Franchisees, then, must turn to other members of the franchise
system to share challenges, successes, and the transfer of knowledge internally. Meiseberg and
Ehrmann (2011) argue that the social construct of internal networking amongst franchisees
positively impacts competition tendencies, meaningful sharing of knowledge, and increases
individual performance. Internal communication strategies between franchisees are highly
effective; however, researchers call for additional studies as this is an underexplored area
(Meiseberg & Ehrmann, 2011).
Studies have shown that improved communication can lead to improved relationships
between the franchisor and franchisee. Both parties must obtain certain levels of trust to have a
strong relational commitment to each other as well as to the brand. There are many types and
styles of relationships that are fostered over the franchise lifecycle.
Relationships
When measuring a franchisee’s intent to remain a part of a franchise, the psychology of
the influence of the franchisor relationship warrants further exploration. The dynamic of the
franchisor-franchisee relationship is unique in that it is one of support and performance success.
Franchising is a hierarchical business structure governed by a legal contract or FA. The
franchisee’s satisfaction throughout the development of this relationship will determine whether
they will commit to renewing their FA, sell their franchise, or abandon their business altogether
(Bentein et al., 2005; Chen, 2011; J. E. Lee & Lee, 2021; Morrison, 1997).
Franchisees have an elevated level of satisfaction when they have a strong interpersonal
relationship with the franchisor (Harmon & Griffiths, 2008; Ishak, 2016). A study of 3,177
franchisees from 58 American restaurant brands concluded that franchisees who experienced
emotional connections with the franchisor, such as caring and trust, had a greater tendency to

14
renew their retention commitment to the franchise system (Kalargyrou et al., 2018). Franchisors
must make a conscious effort to build these personal relationships with the members of their
franchisee family, which can mirror that of a teacher-student relationship at times (Lippard et al.,
2018). Morrison (1997) conducted a survey that sampled 1,596 first-year franchisees from
various industries. The results suggest that when the franchisor intentionally influences
satisfaction by implementing franchisee ideas and other partnership methods, the franchisee
experiences higher satisfaction levels in their investment and tends to renew their franchise
commitment. Similarly, Adeiza et al. (2017) interviewed 26 respondent franchisees and
discovered reoccurring reasons for high levels of satisfaction within the franchisee/franchisor
relationships, including trust, communication, and closeness; the presence of these attributes
dramatically reduces the franchisee’s intent to exit the system.
Due to reputation and word-of-mouth reviews from satisfied current franchisees,
franchisors have more significant opportunities to attract franchisees from various industries and
backgrounds. King et al. (2013) state that happy franchisees can become brand champions and
are viewed as cheerleaders for the franchisor, thus attracting new potential franchisees.
Franchisors desire diversity in background and experience levels in their franchise owners;
however, their past successes do not translate to future success in a new system (Fenwick &
Strombom, 1998).
Another aspect of franchisee satisfaction is that of autonomy. Autonomy is the liberties
that allow for personal influence and creativity within a brand. Some franchise organizations
allow for liberal amounts of franchisee autonomy. In contrast, others prefer their franchisees to
follow the business model as it has been prescribed to them, and likely what attracted them to
join the franchise to begin with.

15
Autonomy
While franchisors have developed a standardized business model that franchisees have
shown a desire to follow and replicate, autonomy in operations is a common cause of conflict.
The lack of autonomy may cause dissatisfaction, negatively impact brand loyalty, and lead to
poor consistency and heightened levels of conflict within the franchise organization (Cox &
Mason, 2007; Raha & Hajdini, 2020; Seid, 2014). In extreme instances, these conflicts have
resulted in brand piracy or undue competition created by former franchisees who violate their
non-compete agreements (Frazer et al., 2007, 2012). The idea of autonomy in franchising is
highly debated and challenged by franchisors. Colla et al. (2019) posit that while the franchisee
desires some level of autonomy, there is no empirical evidence that allowing scales of autonomy
provides a competitive advantage or any other outcome other than the potential for increased,
albeit temporary, satisfaction. However, throughout the history of franchising, there are many
notable contributions to franchisor’s offerings that were initially introduced or developed by
franchisees. Famously, Ray Kroc, the founder of McDonald’s, believed in mutually beneficial
relationships and allowed for autonomy and credits the creation of the Big Mac, Filet-O-Fish,
and the Egg McMuffin to franchisee operators (Combs et al., 2011).
Autonomy is but one aspect of liberties that may or may not be allowed under an FA.
Franchise organizations are governed internally by the legal documents that are agreed upon and
signed by both parties at the beginning of the business relationship. The franchisor is further
under the oversight of the FTC, which controls what franchises can and cannot offer.
Franchisee Background
Successful franchisees can come from various backgrounds, including those different
from the franchise industry. However, there is no evidence that any particular background

16
experience can predict a successful transition into franchise ownership (citation needed here).
According to a survey of 42 retail franchises in New Zealand, no measurable competency
predictors support the hypothesis that success in previous managerial positions translates to
franchise operations success (Fenwick & Strombom, 1998). Fenwick and Strombom’s (1998)
study concluded that retail managers, even those with a successful track record, are not always
successful franchise owners. Unhappy franchisees may attempt to leave the franchise system and
create a competing knock-off version of the franchise business (Frazer et al., 2007).
A qualitative study conducted in Australia by Frazer et al. (2007) concluded that higher
levels of brand piracy, or copying a franchisor’s intellectual property or processes, occurred
when franchisees’ relationships with franchisors had become adversarial. Military veterans,
however, have a high level of success in franchised ventures and are highly desired by
franchisors due to their high standards for operational success (citation needed here). McDermott
et al. (2015) A two-step survey MANOVA study reveals that military veterans experience
greater satisfaction levels in franchise systems than franchisees who have not previously
participated in military service. The success or failure of franchise operations is heavily
dependent on franchisor/franchisee relationships, more so than a franchisee’s previous work
background experience.
Ideally, franchise applicants can follow a strict set of processes and systems that are in
place and that have been proven to increase the chances for franchise location success. Members
of the U.S. Armed Forces have training that closely mirrors that of franchise business models.
The members of the service are accustomed to following orders, adhering to a strict set of
systems and processes, and rarely seek to unsettle the system. Oftentimes, franchisors will join

17
organizations that promote transitioning military members who are looking to further their
careers after retirement.
Military
Franchisors seek to find individuals with a superior work ethic, a positive can-do attitude,
and a mission-accomplished mindset to operate a franchise. Many organizations find great
success in identifying this caliber of a franchisee in those who possess a background in military
service (McDermott et al., 2015; Ramírez-Hurtado et al., 2011). Studies show that military
veterans have a higher level of drive and motivation to be successful and exude higher levels of
satisfaction in franchise organizations compared to franchise owners with no military service
background (McDermott et al., 2015; McDermott & Jackson, 2020).
In a recent study, McDermott and Jackson (2020) identified several emerging themes that
correlate with why military veterans may be attracted to franchise business opportunities. The
decision-making themes included leadership, resilience, growth, support, service, relocation, and
discipline (McDermott & Jackson, 2020). There is a correlation between the emerging themes
and the ethos taught to service members throughout their time in uniformed service. Since
franchise and military operations are systems-driven, this allows for a smooth transition between
military and civilian business life (McDermott & Boyd, 2017; McDermott & Jackson, 2020;
Monson, 2017).
Another category of military veterans seeking opportunities in the franchising world are
retired officers or those members of the armed services who have spent a minimum of twenty
years in service. The average age of an officer who has submitted their retirement package in the
military is 45 (Spiegel & Shultz, 2003). While these members are looking forward to retiring
from the military, they are not looking to retire from a life of work (Moskos, 1977). Many are

18
seeking to begin a second career in the civilian world. Military officers seek opportunities to
transfer their acquired knowledge from the military to a civilian platform (McDermott, 2010).
Officers have experience in personnel leadership, systems, training, implementation, and many
other transferrable skills that franchisors deem attractive to their organizations. Another benefit
of military retirement is that it comes with a pension. Officers will receive a marketable salary
for the rest of their lives, which provides a certain level of financial security and allows for some
personal risk when considering investing in a franchise (McDermott & Jackson, 2020; Spiegel &
Shultz, 2003).
The past several years, more than ever, have shed a light on the topics of systemic equity
and inclusion. More than ever, the franchising industry has made significant strides forward in
addressing these topics as well as ensuring that franchise businesses are incorporating and
promoting a diverse workforce and franchise ownership group. Groups like the IFA (2020) are
tackling this issue head-on with the creation of DiversityFran through the IFA Foundation (IFA
Foundation, 2017). This specific group invests time and financial effort into franchise education
of members of minority excluded communities.
Diversity, Equity, and Inclusion in Franchising
Franchise organizations and the International Franchise Association (IFA) are continually
improving the inclusivity of underrepresented minority groups in franchising. In 2002, 2007, and
again in 2018, the IFA conducted a study with Price Waterhouse Coopers (PwC) to establish a
baseline of gender and minority representation by which future studies are measured (Jackson,
2018;). The study, Franchised Business Ownership by Minority and Gender Groups, aimed to
answer two crucial questions: (a) What is the percentage of women and minority-owned
businesses? (b) What percentage of minority-owned businesses are franchises? A significant goal

19
in conducting the study was to increase women and minority participation in franchise business
and ownership (Jackson, 2018). The study results show significant progress in advancing women
and minority-owned businesses in the United States.
In recent years, there have been notable efforts to increase the participation of women in
franchising. Over the past decade, however, statistics show a decline in male franchise ownership
by (–4%) and an increase in female ownership by 4% (Zippia, 2022). Jackson and Worley (2018;
2019), both with the IFA, stated that an increase of over 50% in women-owned franchises
occurred between 2007 and 2012.
Currently, in the US, the racial representation of franchisees is heavily represented by
White men and women at 71%, leaving nearly one-third of all franchisees in the United States
owned by members of historically marginalized groups (Worley, 2019; Zippia, 2022). Further
breakdowns of the ownership demographics show that Asians owned nearly 12% of franchised
businesses, in contrast to 6% of non-franchised business ownership. Hispanics owned 10.4% of
franchises compared to 7% of non-franchised. Furthermore, Blacks own 8% of franchises
compared to 5% of non-franchised businesses (Jackson, 2018; Worley, 2019). Eyal-Cohen
(2021), however, cautions that the numbers are a rosy misrepresentation of facts and do not serve
justice in cases of socio-economic and inequity disparities. Barriers to minority business
ownership include predatory lending, which can lead to insolvency, inability to experience
growth, racially-biased business practices, and high rates of entrepreneurial failure, to name a
few (Eyal-Cohen, 2021).
Restaurant franchises such as Wendy’s and Mcdonald’s are leading the way in bridging
the gap of perceived inequities in franchise business ownership. Wendy’s Restaurants have
recently rolled out an initiative to lower initial costs and increase franchising opportunities for

20
women and people of color (Evergreen, 2021). In 2001, Yum! Brands, the parent company of
KFC, Pizza Hut, Taco Bell, and others, have announced a program that will accelerate the
pathway to franchise ownership for historically marginalized groups. Earlier this year, Yum!
announced that they will offer 10 MBA students from Howard University, a Historically Black
College, the opportunity for a fellowship, which will result in a franchise of one of their brands
(Jennings, 2022). Similarly, McDonald’s has pledged $250 million to increase franchising
opportunities for underrepresented groups over the next 5 years.
In the restaurant industry, experience generally trumps education. Many franchise models
do list preferred education levels. Not all franchise opportunities require the attainment of
specified educational achievements. However, it is noteworthy to mention the benefits or lack of
benefits that can accompany education and how education can have an impact on the overall
satisfaction of a franchisee during their lifecycle.
Education
The level of education that a franchisee possesses before joining the franchise plays a role
in happiness and satisfaction throughout their franchise system’s lifecycle. Kalargyrou et al.
(2018) conducted a study in the United States on food service franchises that showed that those
with a higher level of entrepreneurial experience or a higher level of education were more likely
to be dissatisfied with their decision to buy into a franchise. This decreased satisfaction is due to
the high expectations set forth by their educational experiences. Combs et al. (2011) also
discovered substantial evidence that there is difficulty educating franchisees who have
experienced other franchise models. According to Combs et al. (2011), the difficulty is that
reluctance and resistance to following the new franchise model stems from being comfortable
with the previous franchise and the unwillingness to learn a new, unfamiliar system. Conversely,

21
an empirical study conducted by Clarkin and Swavely (2006) concluded that franchisees who
possess lower levels of education are more likely to be satisfied with their decision to join a
franchised organization than those who own non-franchised ventures.
Research conducted by Kalargyrou et al. (2018) concluded that franchisors who prioritize
the development of a robust training curriculum, including continuing education opportunities,
engage the level of educated candidates they desire. Franchisees desire high levels of
interpersonal and professional relationships that continue to grow over the time that they are part
of the franchise model (Kalargyrou et al., 2018). Research supports the notion that franchisors
successfully reduce the tendency not to renew the franchisee’s commitment and secure a higher
level of satisfaction when a strong relationship exists (Kalargyrou et al., 2018; Mignonac et al.,
2015).
Franchising Law
The Federal Trade Commission (FTC) heavily regulates franchised businesses and
requires legal documentation that a franchise attorney prepares. Included in this documentation
are items such as a FA, The Franchise Disclosure Document (FDD), and a set of the parent
company’s audited financial statements (Becker & Boxerman, 1999; Nair et al., 2009).
Currently, a franchisor is required to register the business model and subsequent documents in
thirteen states (Antia et al., 2013). So-called registration states add a layer of protection for both
the franchisor and franchisee, and the state may act as a mediator during times of franchise
conflict and renewal lengths and terms (Antia et al., 2013; Becker & Boxerman, 1999; IFA,
2007; Kwak, 2015; Vázquez, 2007).
An FA is a legally binding contract between the franchisor and the franchisee that
describes the parties’ responsibilities to each other throughout their business relationship (Becker

22
& Boxerman, 1999). The FA can cause stress on the franchisee-franchisor relationship. The The
Canadian Press (2018) reported on a dispute between a franchisee of Tim Horton’s, A Canadianbased donut chain, and its parent company Restaurant Brands, LLC. The franchisee had claimed
the franchisor denied a request to renew the FA over a conflict over remodeling the store. The
franchisor claimed that it had no obligation to renew the agreement (The Canadian Press, 2018).
The enforcement of the FA, while necessary to protect the brand’s reputation, can cause
significant stress on the franchise relationship. Franchisees prefer to have relationships that are
more socially based and casual (Adeiza et al., 2017; Antia et al., 2013). Whereas the franchisor
prefers to operate under the guidance of the FDD and the FA, relational challenges can result in
lower satisfaction levels for the franchisee. Internal challenges that can cause franchisee
dissatisfaction include the lack of autonomy, regional market challenges, and hierarchical
governance (Cox & Mason, 2007; Tikoo, 2005). Conversely, franchisor dissatisfaction can cause
irreparable harm to the brand image, lack of consistency, depressed profitability, and slow
growth (Cox & Mason, 2007; King et al., 2013; Wang et al., 2020; Winsor et al., 2012). The FA
and the FDD enforcement can lead to possible litigation but will undoubtedly cause conflict
between the franchisee and the franchisor.
Conflict
While no published studies compare the franchisee-franchisor agreement to that of a
marital arrangement, Thomsen (2020) argues that comparisons between the two relationships are
appropriate. In the early stages of the agreement, the couple experiences higher levels of
happiness, fondness, and shared goals. Relationships not adequately nurtured during the
honeymoon phase will inevitably experience conflict. The conflict between the franchisor and
franchisee is a significant cause of lowered satisfaction in the franchisee’s lifecycle (Thomsen,

23
2020). Taking the time to carefully evaluate whom to choose as a franchisee or a franchisor is
imperative to reducing conflict and dissatisfaction in a franchisee-franchisor relationship
(Brookes & Altinay, 2011).
The franchisee-franchisor relationship is not immune to the conflict that arises in any
relationship. Raha and Hajdini (2020) suggest that the strict definition of roles from the onset of
the relationship may assist in navigating conflict more successfully as it arises. By better
defining the role of the franchisee, the franchisor may avoid costly litigation, disputes that
damage other franchisee relationships, diminished financial performance, and undue competition
that is created internally by dissatisfied franchisees (Antia et al., 2013; Frazer et al., 2007; Fugate
et al., 2018; Harstad, 1994; Wang et al., 2020). The FA and the FDD clearly define the roles and
responsibilities of the franchisee and franchisor (Antia et al., 2013; Fugate et al., 2018; Wharton
& Lewonski, 2011).
Various reasons can cause conflict that exists in the franchisee-franchisor relationship.
Some reasons can include non-compliance with the franchise system or failing to meet the
standards set forth by the FA and the FDD. Another can be that the franchisee believes that the
franchisor is not providing the material support that is expected and needed to successfully run a
franchise operation, including providing marketing materials, updating product offerings, and
generating business in the franchisee’s location. Any preceding reasonings for conflict are a
power struggle between the two stakeholders. Unless either stakeholder deals with issues, they
may have long-lasting impacts on the ability of business relationships to continue (Wang et al.,
2020; Watson & Johnson, 2010; Winsor et al., 2012). According to Raha and Hajdini (2020), the
imbalance of power may stem from the franchisor’s view of the franchisee as an employee rather
than a customer, thus creating multiple stakeholder roles. When a franchisee feels as though they

24
are the lesser in a power dynamic, the tendency to feel dissatisfied with the franchise system is
soon to follow (Frazer et al., 2007; Thomsen, 2020).
Multiple researchers have explored the lifecycle of franchisees, and their studies have
resulted in very similar stage patterns. In the early stages of franchising, a franchisee shows high
levels of interdependence, cooperation, and relationship (Blut et al., 2011; Nathan, 2007;
Thomsen, 2020). Blut et al. (2011) later theorized that the franchisee lifecycle, or the stages that
a franchisee accomplishes during their time in a franchise system, results in a u-shaped diagram
with four separate stages. The four stages of Blut et al.’s (2011) study are honeymoon, routine,
crossroad, and stabilization (Thomsen, 2020). A franchisee’s dependence on a franchisor can be
a cause of conflict if not worked through during the honeymoon phase of the franchise life cycle
(Thomsen, 2020; Tikoo, 2005).
The Effect of COVID-19 on Franchising
From the onset of the COVID-19 pandemic, experts predicted that it would have a lasting
negative impact on business, especially franchised businesses. In a partnership with FranData,
the International Franchise Association (IFA) produced a report documenting the effects that the
COVID outbreak had on franchised businesses in all industries and business categories. In
September of 2020, the report was published and claimed that an astounding 32,000 franchise
locations across the United States had closed, which attributed to over 1.4 million jobs (IFA,
2020). Embedded in the report was the breakdown of affected industries. Topping the list of
closures and lost jobs were the food and hospitality industries, followed closely by entertainment
and recreational industries. Combined, this totaled over 21% of all franchise closures (IFA,
2020).

25
The economic impact of the COVID pandemic was not just felt by franchise
organizations. All business industries felt the business world begin to change. Some of those
changes included remote working, downsizing through layoffs and furloughs, as well as forcing
creativity for product and service delivery to the consumer (Galleher, 2023).
Assumed Causes for Dissatisfaction
Through the review of literature that addresses franchising and the satisfaction of
franchisees, four leading causes for diminished franchisee satisfaction have presented
themselves. These themes are a franchisee’s professional background, interpersonal relationships
with the franchisor, the franchisee’s preferences for high levels of communication, and
franchisee-franchisor conflict. Through the data collection throughout this study, the researcher
hopes to identify the knowledge, motivation, and organizational barriers that prevent high levels
of franchisee satisfaction and retention and provide solutions that franchisors can utilize to close
the satisfaction gap. While the literature presented in this research study navigates various
franchising problems, this review focuses on applying the literature to the problem franchisors
experience in retaining franchisees by improving franchisee satisfaction in their business system.
Increased levels of franchisee satisfaction, in turn, lead to higher levels of franchise agreement
renewals.
Bronfenbrenner’s Ecological Systems Conceptual Framework
This study adapted Urie Bronfenbrenner’s ecological systems framework, which
examined social groups’ impact on a child’s development (Bronfenbrenner, 1974, 1977, 1979;
Guy-Evans, 2020; Hayes et al., 2017). A visual representation of the developmental model as it
was originally appears in Figure 1. Bronfenbrenner’s ecological systems theory is a
comprehensive and influential framework that seeks to understand the dynamic relationship

26
between individuals and their environments, shaping human development across their lifespan.
Developed by renowned developmental psychologist Urie Bronfenbrenner, this theory provides a
holistic approach to studying the complexities of human growth, emphasizing the multifaceted
nature of environmental influences on individual behavior, cognition, and emotions
(Bronfenbrenner, 1974). By recognizing the intricate relationships between individuals and their
ecological surroundings, this theory allows researchers and practitioners to better understand the
processes that shape human development and design more effective interventions to support
positive developmental outcomes. Bronfenbrenner proposed that five distinct levels of influence
surround a child. The five levels of Bronfenbrenner’s ecological systems theory are the
microsystem, mesosystem, exosystem, macrosystem, and chronosystem.

27
Figure 1
Bioecological Model for Development
Note. Adapted from Introducing Bronfenbrenner: A Guide for Practitioners and Students in
Early Years Education by N. Hayes, L. O’Toole, & A. M. Halpenny, 2017. Taylor & Francis.
Copyright 2017 by Taylor & Francis.
Microsystem
The microsystem is the innermost level of Bronfenbrenner’s ecological systems theory
and comprises the immediate and direct environments in which an individual interacts daily
(Hayes et al., 2017). These contexts are characterized by face-to-face relationships and direct
experiences, such as family, peer groups, schools, and neighborhoods. The microsystem plays a

28
crucial role in shaping an individual’s beliefs, attitudes, and behaviors and influencing their
socialization process. For example, a child’s relationship with their parents and teachers can
significantly impact their emotional development and academic performance. Understanding the
intricate dynamics within the microsystem is vital for comprehending the factors contributing to
an individual’s personality and socialization patterns (Bronfenbrenner & Evans, 2000).
The microsystem level for the franchisee includes the immediate and direct environments
with which they interact daily. This environment consists of the franchisee’s interactions with
their employees, customers, suppliers, and fellow franchisees within their specific franchise
location. The relationships and dynamics within this microsystem significantly impact the
franchisee’s managerial approach, customer service, and team leadership skills. Positive
relationships with employees and satisfied customers can foster a supportive work environment
and contribute to the franchisee’s business success.
Mesosystem
The mesosystem represents the interconnections and interactions between various
components within the microsystem. It emphasizes the importance of understanding how
different microsystem settings influence each other and jointly impact an individual’s
development (Bronfenbrenner, 1974). For instance, the collaboration between parents and
teachers in supporting a child’s education forms a mesosystem connection that can positively or
negatively affect the child’s academic progress. Analyzing the mesosystem allows researchers to
identify potential sources of stress, conflict, or support arising from the microsystem
components’ interconnectedness (Bronfenbrenner, 1974, 1995; Bronfenbrenner & Ceci, 1994;
Bronfenbrenner & Evans, 2000).

29
The mesosystem level for the franchisee involves the interconnections and interactions
between the various components of their microsystem. These components include the
collaboration and communication between the franchisee and the corporate headquarters or the
parent franchisor. The support and guidance provided by the franchisor, along with the resources
and training offered, can shape the franchisee’s business practices and strategies. Effective
communication and cooperation between the franchisee and the corporate entity enhance the
chances of achieving common business goals.
Exosystem
The exosystem encompasses environments that indirectly affect an individual’s
development, even though they do not involve the individual directly. This level includes
external settings in which the individual does not actively participate but significantly impacts
their life and experiences (Hayes et al., 2017). Examples of the exosystem include a parent’s
workplace, community services, mass media, and government policies. For instance, a parent’s
job demands and work-related stress can influence their availability to spend time with their
child, affecting their emotional well-being. Analyzing the exosystem highlights the importance
of considering indirect influences on human development (Bronfenbrenner & Ceci, 1994).
The exosystem level for the franchisee comprises external settings that indirectly
influence their business but in which they do not actively participate. The exosystem may
include local government policies, economic conditions, and market trends (Bronfenbrenner,
1995; Bronfenbrenner & Evans, 2000). For instance, changes in local regulations on business
operations or economic downturns may impact the franchisee’s sales and profitability. Economic
stability and supportive local policies can create a favorable business environment, while adverse
conditions may present challenges.

30
Macrosystem
The macrosystem constitutes the broader cultural, social, economic, and political systems
that shape society’s values, norms, and ideologies. It encompasses cultural beliefs, customs,
laws, and economic policies that influence the development of individuals within that society
Bronfenbrenner, 1974, 2000; Hayes et al., 2017). The macrosystem plays a crucial role in
determining the overall framework within which the other systems operate. For example, cultural
attitudes towards gender roles can impact the opportunities available to individuals in education
and the workforce. Understanding the macrosystem provides insights into how societal factors
contribute to variations in human development across different populations.
The macrosystem level encompasses the broader cultural, social, and economic factors
that influence the franchisee’s business in the broader society. This societal environment
includes cultural attitudes toward entrepreneurship, consumer behavior, and societal norms
related to business practices. For example, in a society that highly values entrepreneurship and
innovation, the franchisee may receive more support and recognition for their efforts. However,
the franchisee may encounter resistance or skepticism in a culture that favors traditional business
models.
Chronosystem
The chronosystem acknowledges the temporal dimension and historical changes within
the individual’s environment. It highlights the significance of understanding the impact of time
on development and how societal events, life transitions, and historical trends shape an
individual’s experiences and opportunities (Hayes et al., 2017). For instance, technological
advancements, societal values, or economic fluctuations can significantly influence an
individual’s development. Analyzing the chronosystem enables researchers to consider the

31
temporal aspects of human development and how experiences across different life stages can
have lasting effects (Bronfenbrenner & Evans, 2000).
The chronosystem level considers the temporal dimension and historical changes that
impact the franchisee’s intrapreneurial journey. This system includes technological
advancements, changes in consumer preferences, and economic fluctuations over time. For
instance, rapid technological changes may require the franchisee to adapt their business
operations to remain competitive. Economic recessions, high inflation rates, or industry shifts
may also pose challenges that demand resilience and flexibility outside the individual
franchisee’s control.
Summary
To explain Bronfenbrenner’s ecological systems theory through a practical lens, consider
a franchisee’s experience within the framework’s five levels. A franchisee is an individual who
owns and operates a business under a FA with a larger organization through the guidance of a
predetermined business plan or structure. Through this practitioner lens, we can analyze how the
various ecological systems intricately interact to influence the franchisee’s development as an
entrepreneur and the success of their venture. Through this adaptation of the Bronfenbrenner
theory, one can also understand the potential impact that groups within these levels have on
franchisee decision-making and satisfaction (Figure 2).

32
Figure 2
Bronfenbrenner’s Ecological Systems Theory
Note. Adapted from Bronfenbrenner’s Ecological Systems Theory, by O. Guy-Evans, 2020,
Simply Psychology (https://www.simplypsychology.org/Bronfenbrenner.html). In the public
domain.

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Chapter Three: Methodology
This study’s purpose was to better understand the knowledge, motivation, and
organizational needs of franchisees in for-profit business environments that would result in high
satisfaction and increased retention. At the time of this study, U.S. franchised organizations were
experiencing an attrition rate of 20% (Adeiza et al., 2017). This industry problem is important to
address as increased franchisee satisfaction can result in better-performing franchise locations
and may reduce the tendency to abandon the franchise system.
Research Questions
This study aimed to address the problem of franchisee satisfaction and how it relates to
retention in the franchising industry. Additionally, the research sought to provide possible
solutions that franchisors can implement to increase the likelihood of retention. Two research
questions guided this study:
1. How do influential personal and social groups inform a franchisee’s decision to leave
a franchise?
2. How do the franchise organization’s policies and regulations affect/influence a
franchisee’s intent to stay?
Overview of Design
The research design suitable for this type of study is qualitative phenomenological.
According to Creswell and Creswell (2018), phenomenological design is the collection of data
through interviews that tell a story of participants’ lived experiences. By inquiring about the
phenomenon, I sought to discover the franchisees’ interconnectivity and their lived experiences
(Merriam & Tisdell, 2016). This study utilized Bronfenbrenner’s systems theory framework,
which investigates the influence that system groups have on franchisee decision making and

42
tendencies to stay and whether those ecological influences support or diminish franchisee
satisfaction.
Research Setting
The interviews took place through 10 separate Zoom calls. I utilized Zoom for several
reasons, including ease of access and the ability to utilize transcription services, but most
importantly, to create a safe space in a neutral environment to eliminate the pressure sometimes
experienced in formal research interview settings. The interviewees are past and present business
owners who have worked within the parameters of a franchise business model, so each brought
their lived experiences to the research. Creswell and Creswell (2018) stated that a
phenomenology study, such as this one, will require a sample size of 10 to 15 participants. The
sample for this study consisted of 10 former franchisees.
The participants were required to have specific qualifications. These inclusionary and
exclusionary determinants ensured that the sample population met the criteria for this study
(Creswell & Creswell, 2018). Including their contact information on an organization’s FDD
automatically qualified them for participation in this study.
The Researcher
As it pertains to this study, my positionality, power, and possibly biases are that I am a
franchisor in an organization, a CEO of a franchise, and I deal with franchisor-franchisee
relationship conflict as a part of my daily job. My professional responsibilities were not
disclosed to reduce the chances of bias and under-sharing from respondents, and I conducted the
interviews purely academically. My introduction to the interview refers to me only as a doctoral
student attempting to understand a problem. In the collection of data, I was careful not to allow
my thoughts to drift and, instead, actively listened to the respondents’ answers. If I had not

43
listened carefully, I could have missed critical clues that could have proven valuable in this
study.
Data Sources: Interviews
I collected data through semi-structured interviews. Semi-structured interviews were
appropriate for this study due to using a uniform predetermined list of questions for each
respondent while allowing for additional probing questions as new ideas or topics presented
themselves (Merriam & Tisdell, 2016). The 10 respondents were selected to represent a variety
of former franchisees to obtain adequate data to code. However, Merriam and Tisdell (2016)
recommended that a minimum acceptable sample size be predetermined. This minimum size
allowed me to maintain enough rich data to adequately explain the phenomenon proposed in the
study’s purpose. I coded the interview data to determine correlational values between the
respondents’ experiences as franchisees to develop possible solutions based on the data.
The target population for this dissertation was individuals who previously participated in
a franchise. The approach to data collection was qualitative. Still, it added a humanistic element
to the research by adding a lived experience component to the study and offering an opportunity
to quickly draw correlational parallels (Merriam & Tisdell, 2016).
Qualitative, semi-structured interviews allow respondents to answer questions in a
storytelling format that allows for a deep exploration of settings they have participated in and
that significantly affected their lives, whether positively or negatively (Merriam & Tisdell,
2016). Merriam and Tisdell (2016) also stated that for researchers to generate good data-rich
answers, they must ask good questions. The interview protocol for this study was carefully
constructed and underwent the rigors of an institutional review board (IRB) review. All data
were collected by recording respondent information using video and transcription services and

44
researcher field notes or diaries (Creswell & Creswell, 2018; Gibbs, 2018). All questions in the
interview protocol are open-ended, which elicited answers to allow the storytelling of the
participant’s lived experience (Creswell & Creswell, 2018).
I conducted interviews with 10 individual respondents. I chose respondents because of
their status as former franchisees. I presented them with a brief qualifying questionnaire to
determine that they met the study requirements. The representative group assisted in validating
claims of franchisee satisfaction or the lack thereof and allowed me to develop recommended
solutions. The interviews were slated to last 60 minutes. The interview protocol for this study
consists of 12 open-ended questions covering the interviewee’s experience, positive and negative
aspects of franchised business models, and outside influences on business decisions that may
have led to decision-making events (Hayes et al., 2017).
Participants
Due to the specific nature of the study, I used purposeful sampling to gather informationrich data (Merriam & Tisdell, 2016). Purposeful sampling suggests that if the researcher wants to
gain insight into a problem, they must choose a sample from which they can learn (Merriam &
Tisdell, 2016). The maximum variation type of purposeful sampling allowed for the collection of
comprehensive phenomenological-based data since the experiences between franchisees varied
broadly according to their experiences (Creswell & Creswell, 2018; Merriam & Tisdell, 2016).
The interviewees were 10 respondents, consisting of former franchisees from a variety of
industries. The interviewees were selected through FDD public records, which provide lists and
contact information for current and past franchisees, Facebook searches using keywords “past
franchisee” and “former franchisee,” peer referrals, and a request for participation notice in a
franchise publication. The solicitation of participants was accomplished through email

45
introductions of the study, peer social network recommendations through social media requests,
and cold-calling participants via information found in their franchise organizations’ FDD. The
initial contact outlined the qualifications for participation.
This study’s final number of participants was 10. While 15 was the target sample, the
minimum acceptable sample for this study was 10. To reach the appropriate number of
participants and to consider the potential for participant fall-off, change of heart, and other
reasons to excuse themselves from the study, which is undefined, my goal was to contact three
times the target number. Creswell and Creswell (2018) suggested a range of 10 to 15 for
phenomenological research. Mocanasu (2020) stated that qualitative studies can reach the point
of saturation. Saturation occurs when any additional data generated in the data collection process
does not result in new topics, themes, or further insights into the problem (Creswell & Creswell,
2018; Merriam & Tisdell, 2016; Mocanasu, 2020). Utilizing the top end of the spectrum, the
study’s results are more robust and comprehensive in their conclusion and recommended
solutions.
Instrumentation
The instrument for this study was a semi-structured interview protocol. I chose this
approach as the best way for the respondents to feel comfortable opening up to tell their stories.
Having set questions and reserving additional ones derived from the participants’ narratives
provided the most in-depth information and put the interviewees at ease. While the interviews
were conversational, they still followed a structured list of questions. Therefore, an unstructured
approach was not appropriate (Merriam & Tisdell, 2016). The format and design of the interview
questions addressed the research questions concerning the relational values of franchisors and
franchisees and the correlation between satisfaction and performance. The interview questions

46
intentionally focused on those two aspects of the study. Interviews will consist of 12 questions
with 15 participants, which is the ideal sample size for this type of research design (Creswell &
Creswell, 2018). Interview questions address key concepts of knowledge, motivation, and
organization and are assigned a Patton’s (2002) types of questioning (Appendices A and B). I
used field notes, video, and voice recordings of the interviews and converted the recordings to
print using the audio transcription app Otter. The time expected to complete each interview was a
maximum of 60 minutes.
I scheduled the interviews at a rate of three per day based on participants’ availability.
Calendar appointments were set on the scheduling app Calendly and blocked for 75 minutes to
allow for brief introductory and closing remarks. The weekends were made available to conduct
these interviews, as many participants’ availability was greater on the weekends. However, I
made flexible timeframe accommodations to maximize the participation rate. While interviews
were expected to last no more than 60 minutes, an additional 5–10 minutes were added on the
front end and back end of the timeline to introduce and conclude the interview.
Data Collection Procedures
Due to the broad span of franchisee locations, interviews took place via Zoom. This
platform allowed the interviewee and me to connect personally without being in the same room.
The use of Zoom also let the respondent be in a familiar and comfortable location, which
translated into being comfortable throughout the interview. I scheduled interview blocks for 75
minutes, but I anticipated that most would take approximately 40 to 45 minutes. All interviews
were recorded with permission and transcribed through Zoom recordings and Otter, a voice
transcription service, and field notes (Creswell & Creswell, 2018). The introduction to the
interview questions ensured the respondent’s confidentiality and kept them at ease about the

47
purpose of the data. At the interviews’ conclusion, the interviewees were reminded that their
participation was voluntary and of the methods for protecting their confidentiality, data, and the
ethics of the study’s purpose (Merriam & Tisdell, 2016).
Data Analysis
I used qualitative, semi-structured interviews to collect data (Creswell & Creswell, 2018;
Merriam & Tisdell, 2016). Upon the completion of all 10 interviews, I deciphered the results
utilizing the technique referred to as interpretive coding. Interpretive coding is the process where
the researcher interprets the respondents’ answers and generates a better understanding, concept,
or ideas for potential solutions (Gibbs, 2018). I reviewed the data to identify correlations of
experience in the respondents’ answers as part of the coding process. The data coding identified
similarities in experiences that led to leaving the franchise business.
Conversely, the similarities can be coded against present franchisee data to determine the
likelihood of them showing signs of dissatisfaction that may lead to attrition. A comparative
analysis determined similarities or differences in the participants’ lived experiences as verbalized
throughout the interviews (Gibbs, 2018). Data provided a deeper insight into the knowledge,
motivation, and organizational needs and barriers to satisfaction in franchising and will assist in
goal creation and the proposed solutions presented in Chapter Five.
Credibility and Trustworthiness
I utilized member checks, peer reviews, and maximum variation to maximize credibility
throughout the study. Member checks added an internal layer of validity by taking preliminary
data analysis results and presenting them to a select group of respondents. Upon receiving the
data, I asked the respondents if the collected information rang true to their experience (Merriam
& Tisdell, 2016). This method was helpful, as the franchisee experience can be very different for

48
each brand and industry, so I presented them with the basic information to ensure that the
generalizations were consistent across the sample.
Peer reviews present the findings to colleagues or others knowledgeable of the topic of
study (Merriam & Tisdell, 2016). This method is appropriate due to my extensive network of
franchisors and memberships in franchise associations such as the IFA. Since this study aimed to
improve satisfaction among franchisees, the research results will be shared with franchise
organizations to benefit from the study’s findings.
Maximum variation is the diversification of the sample population to ensure that the
researcher receives information from the broadest pool of respondent candidates (Merriam &
Tisdell, 2016). The selection of the respondent sample does not reflect any specific category of
industry but rather is representative of franchisees. Since this study focused on past franchisee
experiences, this method was appropriate to utilize as it allowed me to draw information from the
widest cast net.
Ethics
As the researcher, I applied for consideration through the University of Southern
California’s IRB portal. I received approval before contacting participants and conducting
interviews. I also constructed and sought approval for implied consent forms during the IRB
review. Through the guidance of the IRB and its rigorous ethical approach to protecting human
subjects, exceptional care ensured the protection of anonymity and the well-being of
interviewees and data collection. As most ethical violations occur in the early stages of research
planning and data collection, careful efforts to protect the identity of participants were made by
assigning a pseudonym, ensuring anonymity and confidentiality (Gibbs, 2018). I presented
respondents with an information sheet for exempt research form (Appendix A) disclosing the

49
purpose of the study, potential risks and benefits of participation, and a statement of
volunteerism (Gibbs, 2018). The design of these forms ensures that participants understand the
purpose of the study and its provisions and the protection of their human rights (Creswell &
Creswell, 2018). Additional security best practices included data encryption, which transformed
plain text files into a format that allowed only authorized users to access the data via a password.
Data were then transferred to a portable media device, followed by the deletion or destruction of
files from laptops, PCs, and all other data recording devices that were no longer needed
(University of Missouri, 2022).
Limitations and Delimitations
This study focused on a small sample representative of two franchisee outcomes: those
who have been successful in a franchise system and those who have not. Members of the sample
represent multiple franchised organizations. Delimiting to one representative franchise would not
provide data representing franchising as a whole. The key to this study was identifying the
causation of franchisee dissatisfaction and the correlation throughout franchising.
Limitations of this study include the small sample. While the size of 10 participants is
appropriate according to Creswell and Creswell (2018), a larger sample size would provide a
more rich data set. Another limitation is not having the complete background information of the
participants. There may be underlying reasons for success or failure that were not presented or
verbalized during the interviews. I made some assumptions for the reasoning of success or
failure before conducting the interviews, which may or may not be valid.
I am the founder and CEO of a national franchise, which presents the potential for bias in
this research study. While the researcher is currently a franchisor, he is also a past franchisee. I

50
made efforts to improve active listening skills, and all questions asked during the interviews
were appropriately reviewed by outside unbiased peers and the IRB.
The study focuses on the opportunity to improve the satisfaction level of the franchisees
of any franchised business model. However, careful steps were taken to make this delimiting
factor. Data, solutions, and implementation recommendations can be utilized by any franchise
organization that desires to improve its franchisees’ satisfaction. Using Bronfenbrenner’s
ecological systems framework will allow any franchise business to utilize the outcomes of this
study to improve their organization.

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Chapter Four: Findings
This study investigated the main factors that make franchisees unsatisfied in their
participation in a franchised business model to determine which of those factors result in the
non-renewal of their FA. The study, through open-ended interview questions, also identified
outside groups within the ecological system that have a negative influence on the franchisee and
aid them in making this impactful decision. The use of Bronfenbrenner’s ecological systems
theory and its conceptual and theoretical framework brought to the surface the events, policies,
and groups that affected the franchisees’ retention. Two research questions guided the data
collection and research:
1. How do influential personal and social groups inform a franchisee’s decision to leave
a franchise?
2. How do the franchise organization’s policies and regulations affect/influence a
franchisee’s intent to stay?
Participants
I conducted interviews with 10 former franchisees, chronicling their experiences as
franchisees in a variety of industries ranging from home inspection services to fast food
operators. Participants openly shared their stories of the ups and downs of franchising, the
successes and challenges of being a business owner, and the groups that influenced their decision
making. The interviewees were all in the same ethnicity category (Caucasian) but provided a
diverse viewpoint in other demographic categories, such as age and educational backgrounds
(Table 1).

52
Table 1
Summary of Participants’ Demographics (N = 10)
Pseudonym Age Gender Marital status Education
Aaron
Brian
Chad
Doug
Evan
Felicia
Grant
Henry
Isaac
James
35–44
35–44
45–54
65–74
65–74
45–54
35–44
55–64
65–74
55–64
Male
Male
Male
Male
Male
Female
Male
Male
Male
Male
Married
Married
Married
Married
Married
Married
Married
Divorced
Married
Married
Bachelor’s
Associate
Bachelor’s
Master’s
High school
Associate
Some college
High school
Bachelor’s
Bachelor’s
Aaron
Aaron and his business partner purchased a pre-opened franchise location that had been
turned over to the franchisor by the original franchisee due to insolvency. Aaron was the
managing partner and was earning his share of the equity by managing and working in his store
full-time. This was Aaron’s first business ownership opportunity, and he was looking forward to
expanding his ownership to multiple locations over time. At the time of the interview, Aaron was
working for the company that he had worked for prior to becoming a franchisee. Aaron still
aspires to be financially independent and own another business, possibly another franchise.
Brian
Brian is an entrepreneur who owns several different franchise brands. Brian previously
was a franchisee for a national bakery business that specializes in breakfast and lunch quickservice dining. He sold his ownership in the bakery franchise to focus on the growth and
expansion of his own budding franchise brand. Brian has since grown his brand to 15 full-service
restaurant locations.

53
Chad
Chad and his family have been involved with franchising his whole life in a variety of
industries, including quick-service dining, fast food, and business brokerage franchises. Chad
eventually split off from his business brokerage franchise to start his own competing business
model. After many years in the industry, Chad recently sold his brokerage firm to focus on the
operations of an emerging donut franchise in Arkansas. He and his wife are currently multi-unit
franchise owner-operators in Northwest Arkansas.
Doug
Doug brought a popular BBQ franchise to a small town in Southeastern Oklahoma and
experienced immediate success. Doug became a community pillar in the business community
and was involved in local government as well as many civic organizations. An unfortunate
illness that caused Doug to lose both of his legs was the ultimate cause of closing his franchise
location. Still, Doug is committed to continuing his service to his local community and has
recently earned a master’s degree and has been accepted into a doctoral program.
Evan
Evan is passionate about franchising. Evan was a multi-unit owner-operator of a popular
sandwich franchise. Evan owned several locations in two states and cited his love for franchising
as a driving force in his two sons’ decisions to become franchisees of a famous chicken sandwich
brand. Evan personally knew the founder of his franchise and has fond memories of their time
together in growing the business. Evan became emotional during our interview and said that he
had not reflected on his franchise ownership in quite some time and was thankful for the
opportunity to share his story.

54
Felicia
Felicia was a multi-unit hamburger franchise owner-operator with locations in several
states from coast to coast. On numerous occasions, she worked directly with the franchise’s
corporate leadership to produce a model that would entice single-unit owners to explore multiunit ownership. Felicia led the charge to open the restaurant concept to military bases on the east
coast. Felicia cited the onset of COVID-19 restrictions on military bases and the restaurant
industry in general, as well as the lack of support from the corporate entity, as leading to the
ultimate failure of her locations.
Grant
Grant was an employee of a national donut franchise and performed so well as an
employee that the franchise ownership offered to finance a store for him. Grant experienced
immediate success and operated the store to profits that had never been seen at that location.
Grant cited personal financial challenges while learning to manage the influx of money into the
store, labor struggles, and steep capital loan payments as reasons that he had to give up his store.
Henry
Henry purchased his BBQ restaurant with money he received from an accident
settlement. Henry’s customers would see him work the counter and the kitchen from his
wheelchair, and this site was a common theme of inspiration to repeat customers. Henry cited
high volumes of catering orders as one of the main factors of his success. High rent and lower
customer traffic led Henry to relocate his store to a less costly location, against the wishes of the
franchise leadership. Low customer volume, low location visibility, rising meat costs, and an
influx of competitive national brands into his southwest Missouri market led Henry and his
family to make the difficult choice to permanently close their location.

55
Isaac
Isaac was a franchisee of a home service company. Isaac, at the time, was the only
service provider in the area that did the work that he did, so he felt as though he had it made.
Later, a few national chains that provided the same service entered into his market and offered a
cheaper pricing structure. This market entry proved to be too challenging to overcome, and Isaac
eventually closed his franchise.
James
James is a businessman who fights for what he wants. When the corporate office of the
national sandwich franchise disagreed with the location he selected, James offered to sign off on
a waiver that he would not take action against the company if his location failed. The location is
still one of the top-performing locations in the entire company. James’s story has been shared at
corporate franchise events, and he was a critical fixture in the tremendous success of the brand’s
growth. Ultimately, a conversation with his young son, who asked if he was coming home that
day, led James to sell his locations. James continues to own and operate business ventures in
southwest Missouri and is a sought-after consultant used by prospecting franchisees.
Findings for Research Question 1
The first research question asked, “How do influential personal and social groups inform
a franchisee’s decision to leave a franchise?” Chapter Two discussed the many reasons that
franchisees abandon their franchises. All participant interviews (N = 10) took place over 3
weeks, spanning April and May 2023. The semi-structured interview protocol consisted of 12
questions, each of which was asked and answered by all 10 participants. I constructed all
questions to facilitate meaningful conversation about the participants’ experience as franchisees
in businesses where they no longer participate. Probing questions enticed deeper dives into

56
franchisees’ experiences until their answers became personal storytelling experiences, which
produced rich data for this study. Due to the nature of relationships in franchising, many
questions overlapped and began to answer both research questions.
The next section will discuss the findings of both research questions. The participants
were open and honest in their conversations throughout the interviews. At times, they were
critical of some aspects of their experience. Still, a vast majority of the discussion was spent
discussing their experience in a complementary fashion. The emotions that participants displayed
throughout the interviews were joy, frustration, sadness, and even regret. All participants were
complimentary of the study themes and mentioned that this is important to research for both
franchisors and new franchisees.
The following findings are representative of the participants’ answers as taken from their
interviews. Participants discussed business, personal aspects of franchising, family attitudes and
influence in decision making, and other outside influential factors that may sway a franchisee’s
overall mental health in franchisee happiness and satisfaction levels.
Theme 1: Franchisor Influence, Microsystem
The participants shared common experiences when referring to the relationship between
themselves and their franchisors. The franchise organization itself is a part of the franchisee’s
microsystem. During the interviews, seven participants referred to the franchisor or the CEO of
the franchise as a member of the family or someone whom they could lean on for advice. The
following sections present selected quotes from the participants’ interviews that support this
claim.
Chad classified his franchisee/franchisor relationship as a very intimate one that
developed over many years. When asked to expand on the closeness of the relationship, Chad

57
stated, “I’ve eaten dinners at his dining table in Charleston. And I know his family, like, you
know, I’ve known him for 35 years and work side by side with him in troughs.” Aaron
mentioned that the relationship with the franchisor sometimes went beyond business-related.
Arron said,
There was a birthday party every year, and we were always invited to that, you know. …
One of the franchisor’s big birthday bash, and that was a, you know, whole family was
invited to that, my wife and everything beyond that.
Doug mentioned that the franchisor was very involved in getting to know store owners’ families
in the franchise process. Doug said, “My family would be there. They all knew Bob. Bob knew
them.”
James’s former employer was the franchisor of his business. As James got older and
moved on to college, their paths crossed again, and James mentioned that he went into the
franchise business because he had a multitude of trust in the man who founded the business.
“And so, mine was a trust factor. I trusted the guy at the top because I could look him in the
eyeball and shake his hand. Our FA was even done on a handshake … no paperwork,” James
stated.
Not all franchisor/franchisee relationships were positive. Sometimes, the franchisee felt
as though the franchisor let them down in their business venture. During 2020, the initial year of
the COVID-19 pandemic, Felicia struggled with her stores that spanned a five-state area; some
were located on military bases. The tipping point for Felicia closing her stores occurred when the
government limited access to military installations. She recalled this situation: “My stores on the
bases closed when COVID happened. They locked down the bases. You couldn’t go. I couldn’t
get employees on to work because nobody could go on to the base.” Felicia continued,

58
When they decided to open back up and allow me to open back up, the astronomical
amount of things that they wanted in place to open back up. I just didn’t have the money
to implement the franchisee wasn’t offering to do anything. And so I just walked away.
While not directly affected, Evan shared that some franchisees were the victims of difficult
economic times. Evan recalled, “There was a lot of people that got into it [the franchise] and had
to struggle because, in 2008, we took a turn down yet with the economy, which was very, very
difficult at that time.”
Change in the franchise operation was another common theme of dissatisfaction among
the participants’ experiences with other franchisees within their business model. Autonomy,
although not guaranteed within a predetermined business model, is still a trait that franchisees
wish they had. The power to make decisions in the best interest of franchise locations and the
franchise was a common theme. Five of the 10 participants mentioned aversion to change.
When the front office staff made changes to the website, which is a critical element to
receiving leads for business, Chad stated, “There were changes in how we did things. … You
would get a lot of bitching and moaning there because everybody had an opinion on how the
website should look, and it was only going to look one way.” Chad continued to say that some
changes were more tolerable than others: “When there were changes like a change in leadership,
like if the marketing guy was gone and then we brought in somebody else, this was understood
and a business decision.” Chad felt other changes were bad news for the franchisees and
ultimately led to brand issues and franchise trouble. Franchisees were resistant to large-scale
changes and saw the writing on the wall. Chad continued,
Typically, change was not well received by the franchisees overall, and of the franchise,
you’re just kept changing. Adjust your different roles, different people. It was just the

59
way that it worked until they ultimately sold to a group that had nothing in common with
any of us, and that was the beginning of the end.
Others attributed low franchisee satisfaction to a lack of change. Evan mentioned that the
franchisor did not have the buying power to assist franchisees in lowering their costs. Evan
stated,
It made me kind of disgruntled to the fact that the reason I couldn’t get my food costs
down was maybe part of my corporate file because their buying power was not very
great. You know, where Subway has 11,000 stores, we hit 200 nationwide, maybe. So,
our buying power was not great, in comparison.
Brian stated that the franchisor refused to make changes to make the ventures more
profitable. He said, “Ultimately, there was not enough profit after you paid for everything, that it
wasn’t worth it. It wasn’t worth the effort you were putting in.” Brian also mentioned that there
were issues with the franchisor when it came to lowering food costs. The franchisor required all
franchisees to purchase turkey from them: “The turkey was prepackaged, like slices of turkey
that would go on our bagel sandwiches or something like that. But it was, you know, another …
it was an extra 2 bucks.” Brian later found out that the franchisor was receiving a rebate to use
the prepackaged item. Brian recalled,
What I later found out is they were getting a kickback from that product, which was a
little disconcerting, disheartening to us that there was that level of, you know, we already
paying the 5% royalty. Why do we need to pay more for products that is not, you know, it
wasn’t a proprietary make of turkey. It was just normal turkey that you could get
anywhere.

60
Brian continued, “And we were paying a little more than we should have, and when you’re in the
restaurant business, margins are tight anyway. And there was a little stink in our mouth from
that.”
Aaron felt as though his franchisor needed to change its marketing efforts and invest in
other forms of market advertising to educate the customer about its brand. Aaron recalled, “I
really felt like maybe could have been done a little more was like it was some style of marketing
because everything was just 100% Facebook-driven.” Aaron alluded to other franchisees sharing
the same frustrations with the franchise marketing plan. Aaron continued by saying, “I always
felt like maybe there was something more in the marketing department that could have possibly
been done and that would have benefited not just my market but all markets.” Evan echoed the
marketing challenges with his brand, stating, “The biggest complaint was we’re not getting any
marketing help from corporate. How do we address that with them?” Evan also mentioned that
the franchisor was collecting marketing royalties that should have been used to promote the
brand in representative markets. Evan continued, “We had no marketing, even though we were
paying and part of our franchise phase. Our percentages every month. You know, it was
designated like 2% of our sales.”
Grant also experienced a shift in marketing presence with his franchise. Grant’s franchise
also depended heavily on social media marketing strategies. “I felt like by the end, the Facebook
marketing that we were doing kind of dried up.” Grant continued, “Facebook changed their
policy. Your reach wasn’t the same. And I felt like there would have been good opportunities to
look into some type of paid advertisements.” Similarly, Issac mentioned marketing efforts as a
needed change in his franchisee experience. Issac said,

61
I think some of the franchise fee could have been placed toward marketing, area
marketing, and to my knowledge, there wasn’t. We didn’t have social media marketing,
you know, about the only place you had was industry journals or realtor magazines, those
kinds of things. But, yeah, that would have been probably the most help.
Theme 2: Family Influence, Microsystem
Another influence that derives from the franchisee’s microsystem is that of the family.
The family plays a critical role in the life of a franchisee, as owning one’s own business requires
a multitude of hours away from other responsibilities, especially from the home, according to
nine out of 10 participants. James said that time away from family was the main contributor to
leaving his franchise. When asked what the tipping point to leave the franchise was, James
responded, “The major reason I sold [was] because my kid came in … and said, ‘Daddy, you
coming home today?’ And I was, like, I’m done.”
Grant’s franchise experience required him to relocate to a separate state from where his
family resided:
I lived in Oklahoma, and my family stayed in Missouri. So, they’re, for the most part,
they were with me a couple months out of the year, but for them, they just saw, you
know, dad and you know, husband working all the time.
Similarly, Evan’s franchise experience took him and some members of his family away
from others, as he recalled: “So, me and my daughter, my son-in-law, we were in Atlanta for a
year without my wife.” Brain also mentioned that traveling to open new locations took a lot of
time away from his family. Brian stated of his franchise travel obligations:
I think that the traveling because, I mean, we opened up one in Chicago, and, like, we
were like, I was out of pocket a little bit more. They didn’t like how much time I had to

62
spend getting the stores open. And I, you know, had to take some calls that were not
conducive to family life.
Evan’s family was heavily involved in the operations of his franchise store. Evan
recalled, “When we first got into it, and I saw, and I talked to [my wife], and when we get really
got interested in doing this for my family, and with my family.” Evan credited his franchise
experience to the careers that his children now have as franchisees: “All three of my kids and my
son-in-law, all of them are in Chick-fil-A. They’re all Chick-fil-A operators to this day and doing
very, very well!”
Some franchisees leaned heavily on their families for advice when it came to making
decisions to remain open or close. Nine participants sought family support and advice when
making franchise decisions. Henry, who was experiencing health issues, said that his family was
supportive of his decisions: “They knew I was struggling, and it was affecting my health. I knew
I needed to do something. And so they were supportive of me getting out.” Coincidentally, Doug
was also experiencing health issues and leaned on his family for advice on what to do. Doug
said, “We tried everything we could possibly do to figure out different ways strategy meetings,
trying to figure out different ways, you know, let this person take over the franchise and keep it
as a franchise.” Doug and his family also asked the franchisor for assistance in contacting other
franchisees to take the location over. “The franchisor even contacted, I know for a fact, several
other franchisees on the phone trying to see if they could take it over,” Doug recalled.
Eventually, the franchisor elected to take over Doug’s location but ultimately closed it. Doug
stated, “Once I gave it back to the franchisor to run it, they actually closed down after about a
year. And I believe the main reason they did because they didn’t run it with the hospitality that I
did.”

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Aaron felt the franchise put a strain on his marriage. When asked how his wife would
have described the experience, he said,
It was a whole lot of work for not, not a lot of return. … Honestly, I feel like, you know,
she would have said it robbed a lot of time from our marriage. Because I was so tied up in
that, and it never really showed any benefit. Financial benefit.
Aaron also stated,
You know, the overwhelming consensus was like you, you really did do everything you
could, and it just didn’t work. So, there’s no disappointment for anybody if you decide
you want to step away. So, it made me feel more confident.
Theme 3: Subculture Influence, Mesosystem
The mesosystem of a franchise organization includes the other franchisees in the same
system. Five participants mentioned that there were significant conversations of displeasure
between them and other franchisees. The following are direct quotes from the participants
concerning the subculture of franchisees in the mesosystem.
Regarding frustrations shared through phone calls, group texts, or chats, Aaron said,
You know that, as in every business, there were some levels of frustration at points, and
so there were some conversations had at times, with other franchisees that were, you
know, based around frustration and things like that, but I would say it was probably like
65/35. Maybe 35% being, you know, the frustrating conversation versus the primary
thing, and 65% just being, you know, asking for advice, asking for help.
The main frustration that Aaron recalled was about food costs: “There was a lot of talk about,
you know, there’s got to be a way we can get cheaper, we can get better costs, we can increase
our margins.”

64
Chad stated that he did his best to avoid the negativity that tended to surround franchisee
calls or communications that did not include the franchisor because “you would get a lot of
bitching and moaning there.” Similarly, Felicia stated, “A lot of it, I felt, was people
complaining. Franchisees complaining about different aspects of problems they’re having their
stores, and instead of the meetings being sent spent on ‘what are we working on as a brand?’”
James mentioned that the conversations between franchisees were rarely positive and spanned
topics from food costs to favoritism. James stated, “I see what kind of the cult, the attitude or the
climate of these conversations was. That was more informal between franchisees. Again, after
the franchise is beginning to develop.” As time as a franchisee went on, James said, “There were,
you know, complaints, gripes, moans that that were shared within that those informal
conversations.” James continued, “A lot of the complaints were that as we grew a little bit at a
time, there was favoritism on some of this stuff.” The overarching opinions of the participants
were that informal franchisee-to-franchisee were rarely, if ever, positive or productive.
Summary of Findings for Research Question 1
In summary, the participants’ answers to the interview questions show that the franchisee
leans heavily on internal and external entities’ influence. Initially, the franchisee depends heavily
on the advice and guidance of the franchisor, which tends to rate favorably to their experience.
However, as the attention from the franchisor lessens over time, there is a correlation between
the franchisee’s satisfaction level and the amount of communication that they have with other
franchisees. The family support system, however, is the most influential when it comes to
deciding whether to remain in the franchise or to leave.

65
Findings for Research Question 2
The second research question asked, “How do the franchise organization’s policies and
regulations affect/influence a franchisee’s intent to stay?” Chapter Two discussed franchisees’
many legal responsibilities when they join a franchise organization. Two themes emerged from
the interviews that may cause heightened levels of dissatisfaction. Those themes were franchisee
autonomy and the receiving of default notifications. The FDD and FA also dictate what is and is
not permissible in a franchise’s operation under the strict guidance of the business model as
presented in these legal documents. While some levels of autonomy may be allowed, the same
documents would spell out the allowance of autonomy.
Theme 1: Franchisee Autonomy (Mesosystem)
Participants shared examples of desired and even executed instances of franchisee
autonomy. Seven participants expressed a greater desire to have more liberties in product
creation or marketing ideas for their franchised operation. Below are selected interviewee quotes
supporting this claim.
Grant shared his frustrations about needing more autonomy in developing a marketing
and advertising campaign for his local market with the franchise’s approval. Grand stated, “I felt
like there would have been good opportunities to look into some type of paid advertisement,
which we couldn’t do that, you know, contractually.” When asked if he had ever brought up
concerns with the franchisor’s marketing personnel, Grant said,
I mean, we discussed it, and they gave me the reasons for why it wasn’t something that
we that they did as a business and totally understood. It just was it didn’t fit the business
model. And, honestly, at that stage of where I was at in the business, if I wanted to pay
advertising, I wouldn’t have had the money to do it anyway.

66
James told a story about how he chose to defy the franchisor’s established menu and added
additional items to better serve his customers’ requests: “I’ve actually broken the rules and
served six soups at a time instead of two. They only wanted two soups at a time.” Other
franchisees fell victim to the adage, “Why do they get to do it but not me?” Felicia recalled a
franchisee fallout over beer sales in some stores and not others that caused some franchisee
unrest. Felicia remembered, “They weren’t allowed to do the bottle of beer because some states
have different rules. And, so, there was a lot of, like, complaining that way.” She shared that one
“no” would increase requests for autonomy allowances. “Some states were selling soup, but
nobody else was selling soup, or they just, I think, expanded very quickly without taking the time
to make sure they were regulating everything to make sure it was the same,” Felicia shared. She
also stated that, from a franchisee’s perspective, the franchisor seemed weak when placating
some locations, allowing them to have their way and not allowing others the same
considerations. Doug said that, at times, he would circumnavigate the FA and occasionally make
his own decisions about food vendors. Doug remembered,
A part of that was I tried to do exactly what the franchisor wanted. The exact menu
board, the exact prices, the exact everything. So, there were times where we did like run a
special on a sandwich that was never stipulated in any legal document or anything that
we could or could not do that.
Theme 2: Legal Default Notifications (Macrosystem)
Another theme in the interview data was the impact of receiving a legal default
notification from the franchisor upon violating the FA. A franchisee receives a default
notification upon committing a material breach of the FA. The general purpose of a default
notification is to educate the franchisee of the violation, provide the steps to cure the breach, and

67
bring the franchisee back to a posture of good standing. Six participants stated that they received
at least one default notification during their franchisee lifecycle.
James continued his reflection when talking about his run-in with the issues franchisor
about unauthorized soup offerings in his restaurant. James expanded, “I got that phone call from
the attorney. And he goes, you can’t do that.” James told the attorney that stopping would cause
customer issues. James recalled receiving his legal letter: “And, so, I got a letter in 2 days
starting a 5-day cease and desist letter, and so I had to cease and desist.”
Grant recalled the default notification process:
So, if you had an auditor come in and look at your business, and if it failed in cleanliness
or things of that nature, then, you know, you were given a chance to fix it, and then if it
still wasn’t corrected, then you got the notice.
When asked why he received a default notification and its explanation, Grant recalled,
I understood what the expectation was. To be a franchisee, I did receive a notice, maybe
notices of default because of, I mean, my main thing, like I said, was one of my biggest
challenges was employees and maintaining my staff and making sure that things were,
you know, up to standard.
Chad mentioned that, while he never received a default notification himself, it was a
concern of the franchisor. Chad remembered,
When I was just a franchisee, and even just a business broker, I didn’t realize that
defaults were a big thing until Mike and I would drink beer and, you know, every
weekend together and just talk. Mike was smart enough to be the very first guy to say,
“Do you want to know something? I want to teach you something. It’s called plausible
deniability.” But we had many conversations many years ago, and I did learn that there

68
were a lot of defaults, and I never had an issue at all with that. Never, never, never had
issues with the franchisor.
Henry recalled a conflict with the franchisor about a commercial that he produced for his
business,
They placed us in a default, and we were kind of scolded a time or two when I did a
commercial, and I used myself and my partner’s family members to, you know, help
bring in the family aspect or whatnot.
After some conversations between Henry and the franchisor, Henry ultimately complied and
took down the commercial. “But then they started really pushing the brand, and so, you know,
they required me to take it to take it down, which we did.”
While never formally receiving a default notification, Doug recalled that there were times
when he had to break the covenant of his FA to fill in the gaps in his business. Doug stated,
I tried to do exactly what the franchisor wanted. The exact menu board, the exact prices,
the exact everything. So, there were times where we did, like, run a special on a sandwich
that was never stipulated in any legal document or anything that we could or could not do
that.
Occasionally, the food vendor supplying Doug’s restaurant would run out of critical supplies
needed to run his business. Doug states,
Many times we, you know, had sold so much brisket that we couldn’t get any more
brisket. We only got a delivery once a week. So, yes, I did go to Walmart, and I did buy
brisket, which was the exact same brand of brisket that we used. And it was about the
same price. So, we didn’t save any money by doing it. But, you know, there were times
where we had to fill in the gap to do that.”

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Summary of Findings for Research Question 2
In summary, the findings for Research Question 2 support the literature reviewed in
Chapter Two. Entrepreneurs and intrapreneurs alike desire to have autonomy in their businesses.
When autonomy is unavailable, franchisees tend to become frustrated and seek exceptions from
the rule of the FA from the franchisor. Having exceptions not granted, according to the
interviewees, may result in diminished satisfaction with the franchised organization.
Coinciding with autonomy is when a franchisee may receive a default notification or a
notice of breach of contract as defined by the FA. Defaults are issued for many reasons,
including store performance and operational deficiencies, liberties in the interpretation of the FA,
and direct violations of the prescribed rules of the franchise. A variety of outcomes may occur in
a default process, ranging from immediate correction to termination of the franchise. Typically,
default notifications come with a clearly stated pathway to cure the faults. Both themes that
present themselves from Research Question 2, according to the interviewees, can lead to lower
franchisee satisfaction and conflict between the franchisee and the franchisor.
Summary of Findings
Chapter Four explored the franchisee experience of 10 former franchisees from various
industries. The interviews uncovered the joys and frustrations of being a franchisee through an
open storytelling opportunity. The experiences of all the interviewed franchisees revealed five
shared themes that can be used to define the franchise experience for prospective franchisees or
franchisors seeking to improve the franchisee experience. The five common themes in the
participants’ interviews were franchisor influence, family influence, subculture influence,
franchisee autonomy, and legal default notifications.

70
Chapter Five presents a discussion of themes unearthed from Chapter Four and
recommendations for improving the franchisee experience, which will increase the level of
franchisee satisfaction and the opportunity for retention. The discussion for change will reflect
on and use the literature reviewed in Chapter Two. Change recommendations will be presented
using the new world Kirkpatrick model (Kirkpatrick & Kirkpatrick, 2016).

71
Chapter Five: Discussion and Recommendations
Since the outbreak of COVID-19 in 2020, the franchising industry has been in a steady
decline (Galleher, 2023; IFA, 2020). In response, the focus for many franchisors is less on
growth and more on increasing satisfaction and retention of the franchisees who are currently in
their system. However, the average franchisee satisfaction level has yet to be established
(Johnson, 2017). Franchisors examine the reasons that their franchisees become dissatisfied and
leave their business and how they might influence them to stay (Abdullah et al., 2008). This
chapter discusses the research findings presented in Chapter Four, the study’s implications, and
recommendations for future research.
Overview of the Study
This study evaluated and documented the experiences of 10 former franchisees in various
for-profit franchised business ventures. This qualitative study used a semi-structured interview
protocol. A qualitative method was appropriate for this study as it attempted to understand the
impact that individuals or groups have on the social construct of the franchising industry
(Creswell & Creswell, 2018). The semi-structured interview protocol allowed for asking 12
constructed interview questions (Appendix B) and for probing deeper and expanding on thoughts
that might otherwise not be expressed by simply answering the question at face value (Merriam
& Tisdell, 2016). I conducted individual interviews with 10 participants via a secure Zoom
platform over 3 weeks between April and May of 2023. I selected participants after they
completed a qualifying survey (Appendix C), which determined the basic qualifications to
participate in the study. The findings from Chapter Four identified embedded themes to answer
this study’s research questions:

72
1. How do influential personal and social groups inform a franchisee’s decision to leave
a franchise?
2. How do the franchise organization’s policies and regulations affect/influence a
franchisee’s intent to stay?
Discussion of Findings
I adapted and applied Bronfenbrenner’s ecological systems theory as the theoretical
framework for this study. The individual, or franchisee, is imbedded in the center of their
ecosystem, as represented in Figure 2. The five ecosystems surround the individual and influence
decision-making throughout the franchisee’s lifecycle.
To further understand the influence of these ecosystems, I collected data through
interviews as interpreted in Chapter Four and a thorough analysis of literature in Chapter Two. I
then coded the evidence to uncover embedded themes that I utilized for discussion and
recommendations for improvement to the franchise system to increase franchisee satisfaction and
retention rates. Semi-structured interviews with 10 former franchisees allowed them to tell their
lived experiences in a storytelling format and to draw correlations of franchisee experiences to
the point of saturation (Creswell & Creswell, 2018). This chapter will present the triangulation of
findings from Chapter Two and Chapter Four with the theoretical framework of
Bronfenbrenner’s ecological systems theory, as discussed in Chapter Three.
Findings for Research Question 1
Research Question 1 explored how personal and social groups may influence decision
making throughout a franchisee’s lifecycle, specifically when deciding to leave the franchise.
Three themes, franchisor influence, family influence, and sub-culture influence, emerged from
the interview data. Of the five ecosystems, the microsystem of franchisor and family held the

73
most influence over franchisee-future decision making. The results of this theme are consistent
with Harmon and Griffiths’s (2008) study, which found that franchisees are happier when they
have a franchisor who is accessible, caring, and trustworthy.
The family microsystem closely mirrors the attributes of care and trust. Ninety percent of
the study’s respondents mentioned that family played a major role in decision making during
their time as franchisees. Grant lived separately from his family while owning a franchise in
Oklahoma as his family remained in Missouri. James felt heartbreak when his son asked if he
would be coming home from work one night. David became emotional when recalling his time
as a franchisee and reflected on the good lessons that it taught him and his family, who continue
to work in franchising today.
The franchise sub-cultures, which lie in the mesosystem, also play a role during the
franchise lifecycle, both positively and negatively. King et al. (2013) discovered that happy
franchisees can become brand champions and are viewed as cheerleaders for the franchisor, thus
attracting new potential franchisees. Participants reinforced King et al.’s (2013) study, such as
when Brian mentioned that he created a good rapport with other franchisees who were rockstars
in their franchise. Nonetheless, the negative can also have an impact. An example is Chad’s
experience of getting together on franchisee calls: “You would get a lot of bitching and moaning
there because everybody had an opinion.”
In summary, while all participating former franchisees’ experiences were vastly different
in substance, the themes of their experiences weave a thread of familiarity. Improved
relationships with franchisors, inclusion of franchisee family members, and positive interaction
with franchisees must increase to realize formidable change. Implementing a change strategy to

74
improve franchisee satisfaction and intent to remain a part of the franchise once their obligation
has ended could improve the current 20% attrition rate.
Findings for Research Question 2
Research Question 2 explored how policy and legal restrictions may influence decision
making for a franchisee throughout their lifecycle, specifically when deciding to leave the
franchise. Two themes, franchisee autonomy and legal default notifications, emerged from the
interview data. The topic of franchisee autonomy resides in the ecological system of the
mesosystem. Seventy percent of former franchisees mentioned autonomy in their interview.
The theme of legal default notifications resides in the macrosystem. Grant was interested
in promoting his business more on a local level through advertising, which the franchisor did not
permit. James proceeded to sell unauthorized menu items because he felt as though he was better
serving his customer’s needs. Felicia stated that one franchisee request would likely spiral into a
multitude of requests to the franchisor. Lastly, Doug admitted that he would sometimes get
creative with the menu if he felt it was not a direct violation of his agreement. These are a few
examples of how franchisees feel about autonomy within their franchised business.
Chapter Two directly confronts the literature on autonomy in franchising. Colla et al.
(2019) stated that there is no empirical evidence that allowing scales of autonomy provides a
competitive advantage or any other outcome other than the potential for increased, albeit
temporary, satisfaction. Some franchisors have adopted franchisee autonomy to supplement their
already famous brand offerings (Combs et al., 2011). However, others do not want to lose
control of their brand and keep their menu or service offerings consistent across the brand.
Violating the FA can lead to legal ramifications, such as a notice of default.

75
Legal notice of default was a second theme that emerged from the data pertaining to
Research Question 2. Default notifications in franchising are a formal notice of breach of
contract as defined by the FA. While all franchisees knew the illegality of breaching the
agreement, some violated their contracts. Sixty percent of interviewees stated that they received
a formal letter from their franchisor or their legal counsel informing them of a violation that they
had committed and what they needed to do to remain in good standing.
James admitted that he received a notice of default and a cease-and-desist notice from his
franchisor’s attorney when he decided to change the company menu in his store. Grant recalled
receiving a notice for failing an audit as well as failing to keep his store properly staffed. Henry
produced an unauthorized commercial to play locally, which starred family members and other
recognizable community members, but he was asked to take it off the air and only utilize
advertising approved by the franchisor. Finally, Doug received a default notification for
purchasing food items from unauthorized vendors. While all participants admitted that they knew
their actions violated their FAs, they made the conscious decision to take those actions.
An FA is a legally binding contract between the franchisor and the franchisee that
describes the parties’ responsibilities to each other throughout their business relationship (Becker
& Boxerman, 1999). The default process is itemized and well defined in the FA, as is the level of
violation, the time allotted for cure of the default, and violations that result in immediate
termination. The FA is necessary for the franchisor to be compliant with the FTC for the
purposes of reporting and consistency. The disconnect lies in the relationship between the
franchisor and the franchisee. The franchisor has established a business model with guidelines
that they expect to be followed, whereas a franchisee wants their relationship to be based on
social interaction and fun (Adeiza et al., 2017; Antia et al., 2013).

76
In summary, the participants’ experiences when dealing with the legal attributes of
franchising were remarkably similar. Two camps were immediately identified during the
interviews. The first camp was aware of the stipulations that were outlined in their FA and
abided by them to the letter. The other camp chose the motto that it is better to ask for
forgiveness rather than permission. In addressing the two closely related themes of autonomy
and the legal ramifications of FA violation, franchisors must carefully craft policy reviews that
include a deeper level of accountability measures and reeducation for offenders.
Implications of the Study
This study focused on telling the story of former franchisees’ journeys as they navigated
the ups and downs of being involved in a franchise system. The literature suggests that
franchisee satisfaction and retention is a problem that needs to be addressed and that there is a
correlation between the two. As described in Chapter Four, an individual franchisee participates
in many ecosystems of relationships that can shape perception and decision making throughout
the franchisee’s life cycle. Such relationships include those of the franchisor, the family, and the
organizational subculture (e.g., other franchisees). Other variables of influence include
franchisee autonomy and the legal attributes of franchised business agreements.
The outcome of this study will impact the franchising industry in ways that will increase
the satisfaction and retention of the franchisees who participate in a for-profit franchised
business venture and provide a pathway for continuous improvement for franchisors.
Practice Recommendations
The challenges of retention and satisfaction of franchisees is an ongoing issue that must
be addressed if franchisors want to see retention rates improve to over the 80% mark (Adeiza et
al., 2017). The impact of the COVID-19 pandemic further decimated franchise satisfaction levels

77
and caused historic levels of closures of franchised businesses (Galleher, 2023; IFA, 2020).
Franchisees seek greater autonomy, acceptance from their multifaceted relationships within their
ecosystems, more guidance from the franchisor and their respected peers within the franchise
organization, and more inclusion of the family unit while a franchisee.
Two recommendations emerged from the review of the literature and the data gathered
from the participants’ interviews. The two recommendations are the creation of a franchise
accountability coach and the formation of a franchise advisory council.
Recommendation 1: Accountability Coaching
Recommendation 1 is to immediately implement a well-defined accountability model into
the franchise operations for clarification purposes between the franchisor and franchisee. The
participants reported that, in times of questions about the FA, they leaned on their own
interpretation or chose to commit a violation in hopes that it would go unnoticed or that the
punishment would be minor. While only 20% of participants stated that there was someone
within their franchise who coached them through issues or questions about their FA, 100%
expressed that it would have been a welcomed communication tool. This addition will leave very
little to the imagination as to who is responsible for items embedded in the FA (Dubnick, 2020).
A member of the franchisor’s staff should be assigned as an accountability coach and conduct
regular sessions with the franchisee to reduce the potential for misunderstanding or conflict, or a
new accountability coaching position or positions should be created within the organizational
structure.
Recommendation 2: Formation of the Franchise Advisory Council
The second recommendation is the formation of a franchise advisory council (FAC). The
FAC is a group of appointed or elected franchisees who act as a single voice of representation for

78
communication of ideas and concerns to the franchisor for consideration (Beagelman, 2019).
Seventy percent of the participants mentioned that their franchise had an FAC in place or that
having an FAC would have made critical communications easier with the franchisor. Best
practice sharing and franchisee-to-franchisor communication were mentioned in all participant’s
interviews.
The first order of business for the FAC is to establish an effective franchisee
communication protocol. This program will outline the appropriate communication tools,
techniques, and methods approved to voice opinions, complaints, and ideas with the franchisor.
The creation of this protocol will eliminate the need for outside and unapproved communication
methods. The protocol will be presented to non-FAC franchisees in a manual following the first
official meeting of the FAC after the communications document has been approved. Each
franchisee will receive a copy and agree to the new protocol within 14 days of completion. The
FAC chairperson will present the communications guide on a Zoom call, utilizing a PowerPoint
presentation. During the call, following each section, members of the FAC will check on
knowledge by asking questions. There will also be breakout sessions hosted by the three FAC
members so that each franchisee will have the opportunity to ask questions in a small group
setting. Members of the FAC will summarize questions asked in their breakout sessions with the
whole group upon return.
Since the FAC is a peer-led group of franchisees, this program is likely to exceed
expectations in an advanced timeframe. The franchisees and the FAC combined will be able to
take ownership of the effective organizational communication protocol and implement positive
changes that will increase the level of franchisee satisfaction. With the franchisees in place as the

79
benefactors and stakeholders of this positive change, they will see the benefit of increased
communications interaction with the franchisor or a franchisor liaison.
The communications protocol training will take place online via a FAC-led Zoom call.
Each meeting will start with a chairperson-led review and affirmation of the mission statement of
FFI franchise. Initial training will be delivered over 5 days. Each session will be limited to 2
hours. Session 1 will consist of introducing the FAC and defining their positions, roles,
responsibilities, and personal goals for the franchisees. Session 2 will introduce the
communication protocol and the method of delivering ideas, complaints, and challenges to the
franchisor. Session 3 will cover the monthly coaching and best practices call that will take place.
During this session, franchisees will be assigned to a peer coach who will assist them with
solving daily operations challenges and best practices tools. Session 4 will focus on franchisee
success, recognition, and awards that will be implemented moving forward. Finally, session five
will focus on franchisee and franchisor feedback methods.
Recommendations for Future Research
This study revealed that the franchisee lifecycle is riddled with emotional highs and lows.
While some experience great success throughout their journey, others face challenges that
require them to make difficult decisions about their future as franchisees. During this
discernment time, franchisees lean heavily on personal and social support systems embedded in
their individual ecosystems. The relationships can influence decision-making, including whether
to remain a franchisee.
Future research should focus on less-represented members of franchising, including
women, persons of color, and persons of diverse ethnic backgrounds. The inclusivity of these
groups will provide a more thorough study. It may expand on how other cultures lean on their

80
personal and social support systems in the decision-making process. While this study made every
effort to be inclusive to all franchisees, no matter the background, the call for participation was
answered by 90% white males and 10% white females.
Another opportunity for future research is a deeper exploration of franchisee background
and education before entering a franchise organization. This knowledge may allow the researcher
to better understand the root causes of dissatisfaction based on the individual’s experience. This
approach may also look beyond the qualitative storytelling structure and provide a quantitative
survey delivery of data that this research study could not deliver.
A final opportunity for additional research is to include a more significant number of
participants from whom to generate data. While the data provided in this study was rich and
provided saturation in the responses to the level of satisfaction that I had hoped, a broader
candidate pool could provide additional coded language that deserves to be investigated. Any of
the proposed additional opportunities for further research could add to the robustness of this
study and aid in providing recommendations for solving the problem of dissatisfaction and
retention issues that exist in franchised business models in the United States.
Conclusion
Franchised businesses account for over 17% of all business conducted in the United
States and over 25% of the nation’s labor force (Kalargyrou et al., 2018). Every year, 20% of all
franchised operations cease to do business, which causes businesses to invest heavily in
recouping their losses from the number of locations within their brand (Adeiza et al., 2017). For
some smaller brands, this loss recovery may never be realized, and the business may quietly end.
The root cause for this attrition is the dissatisfaction of franchisees within the franchised business
models. Franchisors must recognize and respect the influence that a franchisee’s ecosystem has

81
on their decision-making in their professional lives. If franchisors can establish an inclusive
system that allows for autonomy and collaboration with franchisees, ensure a deep level of
understanding of the franchisee’s responsibilities, reinforce that knowledge with constant
communication, and include the franchisee’s family unit in their business lives, the franchise
attrition percentages may erode over time and a newer, more robust franchise industry may be
the result of these efforts.

82
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Appendix A: Information Sheet for Exempt Research
University of Southern California
Rossier School of Education
3470 Trousdale Pkwy Ste 1100, Los Angeles, CA 90089
INFORMATION SHEET FOR EXEMPT RESEARCH
STUDY TITLE: The Antecedents and Consequences of Franchisee Satisfaction and Retention
PRINCIPAL INVESTIGATOR: Timothy D. Clegg II - Doctoral Student
FACULTY ADVISOR: Patricia Tobey, PhD
_____________________________________________________________________________
You are invited to participate in a research study. Your participation is voluntary. This document
explains information about this study. You should ask questions about anything that is unclear to
you.
PURPOSE
The purpose of this study is to understand why franchisees become dissatisfied with their
franchise and what changes could cause them to stay in their franchise system I hope to learn
ways to improve franchisee satisfaction and retention. You are invited as a participant because of
your specific role within your organization, which fits the defined research population of the
study.
PARTICIPANT INVOLVEMENT
You are asked to participate in a Zoom meeting to be interviewed about the research topic. The
interview is expected to last no more than [insert duration of time]. All interaction for you and
your organization is confidential and anonymous. Neither you nor your organization will be
named or alluded to in a manner that would provide identification.
While it is the desire of the researcher to record the conversation for subsequent confidential and
anonymous transcription so that your responses can be accurately analyzed, such recording is
purely voluntary on your part and is not a condition for participation. The researcher will take
notes as an alternative during the interview as needed.
There is no ‘prework’ necessary for the interview, and it will be held at a time that is to your
convenience and with respect to your schedule and responsibilities.
CONFIDENTIALITY
The members of the research team and the University of Southern California Institutional
Review Board (IRB) may access the data. The IRB reviews and monitors research studies to
protect the rights and welfare of research subjects.
When the findings of the research are published or discussed in conferences, no identifiable
information will be used.

95
Audio recordings, if made, will not have any direct reference to the full name or organization of
the participant and will be used solely for the purpose of analyzing the transcript for relevant
content. The recordings will remain in the sole possession of the research team and will be
destroyed not later than one year from completion and final approval of the study. The study is
expected to be fully completed by [insert your date]. For this study, the Research Team is the
researcher and the Chair of the researcher’s dissertation committee.
Audio recordings, if made, will not be started until the preliminary and identifying remarks of
the participant, and their organization, are concluded. The researcher will refer to the participant
by an arbitrary identification to maintain confidentiality and anonymity. As a part of the research
study, the recordings will be transcribed by a bonded academic paper transcription company. If a
participant desires, a copy of that transcript will be provided for review, editing, or declination of
participation.
INVESTIGATOR CONTACT INFORMATION
If you have any questions about this study, please contact Timothy D. Clegg II, tclegg@usc.edu,
, or Patricia Tobey, PhD: tobey@usc.edu
IRB CONTACT INFORMATION
If you have any questions about your rights as a research participant, please contact the
University of Southern California Institutional Review Board at (323) 442-0114 or email
irb@usc.edu.
USC IRB Information Sheet Template Version Date: 01/30/2021

96
Appendix B: Interview Protocol
Hi, ________________, and thank you for meeting with me today. As I mentioned in our
call, my name is Tim Clegg. I am a doctoral student at the University of Southern California,
working on my dissertation about franchise experience. I’d like to start by thanking you for
taking your time to be interviewed by me. Your feedback will prove to be valuable for the
purposes of my study. I will do my best to keep the interview moving and keep it to 60 minutes
or less. Does that work for you? During the interview, I will ask you about your experience as a
franchisee. Please know that there are no wrong answers in this interview and that your identity
will be held confidentially. Your name will not be used in the reporting of this study but will be
replaced by a pseudonym. With your permission, I would like to record our call. The notes and
transcript will assist me in making sure that I am properly recording your statements and answers
and that I do not misrepresent what you are trying to convey. Do you have any questions for me
at this time?
Table A1
Interview Protocol and Qualifying Survey Questions
Interview questions Potential probes
RQ
addressed
Systems
addressed Q type
How do the values of the
organization align with
your personal values?
What attracted you
to the organization
during the
application
process?
1 and 2 Individual and
microsystem
Beliefs
How would you describe
the culture of your
franchise organization?
What are the tenets
of your
organization’s
mission
statement?
1 and 2 Mesosystem Experience
What are the formal and
informal ways that
What was the
overall attitude of
1 Mesosystem Knowledge

97
Interview questions Potential probes
RQ
addressed
Systems
addressed Q type
franchisees
communicate with each
other?
other franchisees
in zee-to-zee
communication?
chief
complaints/praise?
Based on your franchise
experience, in what
ways did your franchise
compare or contrast to
other similar brands?
What did they do
better/worse?
1 and 2 Exosystem Opinion
How was your franchise
viewed by your
customers? Your
community?
Was your brand well
received by your
community? How
were you
recognized?
1 Exosystem Feelings
What were your
employees’
conversations like when
discussing the
franchisor (aka
corporate)?
Were your
employees
empowered to
share ideas,
concerns?
1 Mesosystem Opinion
How would your family
describe your franchise
experience?
Did anyone advise
you to take actions
concerning
staying or leaving
the org?
1 Microsystem Opinion or
belief
In what ways did the
franchisor include your
family in the franchise
experience?
Trips? Outings? Etc. 1 Microsystem Feelings
What was the tipping
point of your franchise
termination or nonrenewal?
Probing for
similarities
between
respondents’
stories.
1 Individual and
mesosystem
Feelings and
beliefs
How did the legal aspect
of franchising affect
your overall franchise
experience?
Did you ever receive
a default
notification? For
what?
2 Macrosystem Knowledge
What strategies could the
franchisor have
implemented to increase
opportunities for
How often did they
have awards,
recognition,
trophies,
2 Mesosystem Opinion

98
Interview questions Potential probes
RQ
addressed
Systems
addressed Q type
success in your
franchise experience?
certificates, shoutouts?
What changes could have
been made that would
have changed the
outcome of your
franchise location?
(Allowed you to stay in
business)?
If any of these
would have/could
have been
implemented,
would you have
stayed?
1 and 2 Individual Feelings and
opinion

99
Appendix C: Qualifying Survey Questions
Question Possible answers
Are you a past franchisee of a for-profit
business organization? Yes or no
Were you a franchisee of at least one location
for at least 1 year? Yes or no
Was your franchise agreement: Choose one:
Terminated by self
Terminated by franchisor
Not renewed by self
Not renewed by franchisor
Was your franchise located in the United
States? Yes or no

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Asset Metadata

Creator Clegg, Timothy David, II (author)

Core Title The antecedents and consequences of low franchisee satisfaction and its effect on retention: an exploration of a critical issue through the lens of Urie Bronfenbrenner's ecological systems theory

School Rossier School of Education

Degree Doctor of Education

Degree Program Organizational Change and Leadership (On Line)

Degree Conferral Date 2024-05

Publication Date 02/22/2024

Defense Date 12/06/2023

Publisher Los Angeles, California (original), University of Southern California (original), University of Southern California. Libraries (digital)

Tag Autonomy,Bronfenbrenner,franchise,influence,OAI-PMH Harvest,retention,Satisfaction

Format theses (aat)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Tobey, Patricia (committee chair), Daniels, Ruby (committee member), Malloy, Courtney (committee member)

Creator Email tim@hurtsdonutco.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-oUC113839147

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