Spinelli & Birley: Conflict Value in Franchise Systems

An Empirical Evaluation of Conflict in the Franchise System

(Published December, 1998) - It seems there is better market value to a franchise system when franchisees conflict with and engage the franchisor.

A survey instrument of a large group of franchise networks shows a statistical correlation that franchise systems utilizing franchisee conflict and satisfaction at the network level do better. Franchisee–franchisor goal congruence is important to network alliance efficiencies.

Andy Seldon, a franchise lawyer, summed up the work of Spinelli and Birley this way in an interview with Blue MauMau:

"It [the study] shows a very high correlation between the accumulative experiences of franchisees as contrasted with a very limited experience of executive management of franchisors. Their study proves, through vast amounts of economic data to back it up, that companies who fail to enthusiastically embrace that deeper well of know-how, through system planning that is incorporated early on during the growth cycle of the company, fail."

Study can be purchased online in pdf format. Purchase price - $39.