Pricing Practices and Relationship Performance in Franchising: Study in the Food Service Sector
DOI:
https://doi.org/10.51341/cgg.v27i2.3233Keywords:
Franchise, Pricing Practices, Conflicts, Interorganizational Fairness, Long-Term OrientationAbstract
Objective: The study aims to identify pricing practices in Brazilian franchises and their interaction with the franchisor-franchisee relationship performance, represented by conflicts, perception of interorganizational fairness, and the franchisees’ long-term orientation.
Method: Data were collected through interviews with franchisees of Brazilian franchises and subjected to content analysis.
Originality/Relevance: This study contributes by investigating fairness in franchises located in Brazil, highlighting that, in this context, other aspects have a greater effect on relationship performance compared to studies in other countries. Franchisors should pay attention to the asymmetry of risks and rewards and create collaborative environments for franchise development.
Results: Direct pricing prevails, serving to standardize prices and avoid internal competition. An asymmetry of risks and rewards is revealed, conflicts occur due to operational issues, and the long-term orientation is driven by financial performance and franchisees’ aspirations. Although the implication of pricing on relationship performance is not confirmed, cooperative pricing emerges as an option in smaller franchises.
Theoretical/Methodological contributions: This study expands knowledge on interorganizational fairness, highlights pricing practices in Brazilian franchises, and analyzes their interaction with relationship performance in terms of conflicts, fairness, and the franchisees’ long-term orientation.
Downloads
References
Associação Brasileira de Franchising. (2023). Pesquisa de perfil potencial do franqueado. Associação Brasileira de Franchising. https://www.abf.com.br/wp-content/uploads/2024/02/Pesquisa_Perfil_Pontencial_Franqueado.pdf
Associação Brasileira de Franchising. (2024). Números do Franchising / Desempenho do setor. https://www.abf.com.br/numeros-do-franchising/
Alon, I., Apriliyanti, I. D., & Parodi, M. C. H. (2020). A systematic review of international franchising. Multinational Business Review, 29(1), 43-69. https://doi.org/10.1108/MBR-01-2020-0019
Bardin, L. (2011). Análise de conteúdo. Edições 70.
Basset, G., & Perrigot, R. (2015). Franchisees’ Resale Price Policy Facing Legal, Contractual and Professional Constraints: Insights from European and French Perspectives. Research in Law and Economics, 119–142. https://doi.org/10.1108/s0193-589520150000027009
Blair, R. D., & Lafontaine, F. (2005). The economics of franchising. Cambridge University Press.
Bordonaba‐Juste, M. V., & Polo‐Redondo, Y. (2008). Differences between short and long‐term relationships: an empirical analysis in franchise systems. Journal of Strategic Marketing, 16(4), 327-354. https://doi.org/10.1080/09652540802264033
Bouazzaoui, M., Wu, H. J., Roehrich, J. K., Squire, B., & Roath, A. S. (2020). Justice in inter-organizational relationships: A literature review and future research agenda. Industrial Marketing Management, 87, 128-137. https://doi.org/10.1016/j.indmarman.2020.02.003
Boulay, J., Caemmerer, B., Chanut, O., Magali, C., & Fadairo, M. (2023). It takes two to tango: A taxonomy of franchise success determinants. International Journal of Retail & Distribution Management, 51(6), 807-825. https://doi.org/10.1108/IJRDM-05-2022-0174
Brasil. (2011). Lei nº 12.529, de 30 de novembro de 2011. Estrutura o Sistema Brasileiro de Defesa da Concorrência. Diário Oficial da União. http://www.planalto.gov.br/ccivil_03/_ato2011-2014/2011/lei/l12529.htm
Brasil. (2019). Lei nº 13.966, de 26 de dezembro de 2019. Dispõe sobre o sistema de franquia empresarial. Diário Oficial da União. http://www.planalto.gov.br/ccivil_03/_ato2019-2022/2019/lei/l13966.htm
Brasília. (2019, 23 de setembro). Apelação Cível nº TJ-DF 00223938520168070001. Tribunal de Justiça do Distrito Federal. Relator: Hector Valverde. https://tj-df.jusbrasil.com.br/jurisprudencia/900977014/223938520168070001-df-0022393-8520168070001
Brown, J. R., & Dev, C. S. (1997). The Franchisor—Franchisee Relationship. Cornell Hotel and Restaurant Administration Quarterly, 38(6), 30–38. https://doi.org/10.1177/001088049703800617
Bryman, A. (2012). Social Research Methods (4ª ed.). Oxford University Press.
Buchan, J. (2013). The Franchise Network: Legal Fabric of a Global Player. In Franchisees as Consumers (pp. 25-39). Springer.
Chiou, J. S., Hsieh, C. H., & Yang, C. H. (2004). The effect of franchisors’ communication, service assistance, and competitive advantage on franchisees’ intentions to remain in the franchise system. Journal of small business management, 42(1), 19-36. https://doi.org/10.1111/j.1540-627X.2004.00095.x
Cohen, M. C., Elmachtoub, A. N., & Lei, X. (2022). Price discrimination with fairness constraints. Management Science, 68(12), 8536-8552. https://doi.org/10.1287/mnsc.2022.4317
Cornell Law School. (2022, junho). Antitrust. Legal Information Institute. https://www.law.cornell.edu/wex/antitrust
Croonen, E. (2010). Trust and Fairness During Strategic Change Processes in Franchise Systems. Journal of Business Ethics, 95(2), 191–209. https://doi.org/10.1007/s10551-009-0354-z
Elango, B. (2019). A bibliometric analysis of franchising research (1988–2017). The Journal of Entrepreneurship, 28(2), 223-249. https://doi.org/10.1177/0971355719851897
Frazer, L., & Winzar, H. (2005). Exits and expectations: Why disappointed franchisees leave. Journal of Business Research, 58(11), 1534-1542. https://doi.org/10.1016/j.jbusres.2004.08.001
Ganesan, S. (1994). Determinants of Long-Term Orientation in Buyer-Seller Relationships. Journal of Marketing, 58(2), 1–19. https://doi.org/10.1177/002224299405800201
Grace, A., Frazer, L., Weaven, S., Perkins, H., Shao, W., & Nyadzayo, M. (2020). Franchisee advisory councils and justice: franchisees finding their voice. Journal of Strategic Marketing, 30(2), 201–220. https://doi.org/10.1080/0965254X.2020.1740767
Jang, S., & Park, K. (2019). A sustainable franchisor-franchisee relationship model: Toward the franchise win-win theory. International Journal of Hospitality Management, 76, 13–24. https://doi.org/10.1016/j.ijhm.2018.06.004
Johns, N., & Pine, R. (2002). Consumer behaviour in the food service industry: a review. International Journal of Hospitality Management, 21(2), 119-134. https://doi.org/10.1016/S0278-4319(02)00008-7
Kang, B., & Jindal, R. P. (2015). Opportunism in buyer–seller relationships: Some unexplored antecedents. Journal of Business Research, 68(3), 735–742. https://doi.org/10.1016/j.jbusres.2014.07.009
Kumar, N., Scheer, L. K., & Steenkamp, J. B. E. (1995). The effects of supplier fairness on vulnerable resellers. Journal of marketing research, 32(1), 54-65. https://doi.org/10.1177/002224379503200107
Lafontaine, F. (1999). Franchising versus corporate ownership: The effect on price dispersion. Journal of Business Venturing, 14(1), 17-34. https://doi.org/10.1016/S0883-9026(97)00102-X
Lee, J. E., & Lee, S. S. (2021). Effects of fairness on relationship quality and re-contract intention in food service franchise system: comparison between global and domestic franchise. Management Research Review, 44(3), 509–532. https://doi.org/10.1108/MRR-12-2019-0546
Li, K. J., & Jain, S. (2016). Behavior-based pricing: An analysis of the impact of peer-induced fairness. Management Science, 62(9), 2705-2721. http://dx.doi.org/10.1287/mnsc.2015.2265
Liu, Y., Huang, Y., Luo, Y., & Zhao, Y. (2012). How does justice matter in achieving buyer–supplier relationship performance?. Journal of Operations Management, 30(5), 355-367. https://doi.org/10.1016/j.jom.2012.03.003
Madueño, M. C., & García, P. S. (2015). Management Control in Inter-organizational Relationships: The Case of Franchises. Innovar, 25(58), 23-36. https://doi.org/10.15446/innovar.v25n58.52357
Maia, C. R., Lunardi, G. L., Dolci, D., & D’Avila, L. C. (2019). Competitive price and trust as determinants of purchase intention in social commerce. Brazilian Administration Review, 16(4), e190074. https://doi.org/10.1590/1807-7692bar2019190074
Meiseberg, B. (2013). The prevalence and performance impact of synergies in the plural form. Managerial and decision economics, 34(3-5), 140-160. https://doi.org/10.1002/mde.2579
Meiseberg, B., & Perrigot, R. (2020). Pricing-based practices, conflicts and performance in franchising. European Management Journal, 38(6), 939-955. https://doi.org/10.1016/j.emj.2020.04.004
Naatu, F., & Alon, I. (2019). Social franchising: A bibliometric and theoretical review. Journal of Promotion Management, 25(5), 738-764. https://doi.org/10.1080/10496491.2019.1584777
Pequenas Empresas & Grandes Negócios. (2022, junho/julho). 1.113 redes para investir. Guia de Franquias Edição 2022/2023, 398, 174-217.
Perrigot, R., Basset, G., & Meiseberg, B. (2016). Resale prices in franchising: insights from franchisee perspectives. Journal of Product & Brand Management, 25(7), 663-675. https://doi.org/10.1108/JPBM-03-2015-0831
Perrigot, R., Lopez-Fernandez, B., & Basset, G. (2020). “Conflict-performance assumption” or “performance-conflict assumption”: Insights from franchising. Journal of Retailing and Consumer Services, 55, 102081. https://doi.org/10.1016/j.jretconser.2020.102081
Perrigot, R., Terry, A., & Lernia, C. Di. (2019). Good faith in franchising. International Journal of Retail & Distribution Management, 47(3), 246–261. https://doi.org/10.1108/IJRDM-02-2018-0043
Santos, F. A. D. N., Mayer, V. F., & Marques, O. R. B. (2020). Precificação dinâmica e percepção de justiça em preços: um estudo sobre o uso do aplicativo Uber em viagens. Turismo: Visão e Ação, 21, 239-264. https://doi.org/10.14210/rtva.v21n3.p239-264
Shaikh, A. (2016). Conceptualizing fairness in franchisor–franchisee relationship: Dimensions, definitions and preliminary construction of scale. Journal of Retailing and Consumer Services, 28, 28-35. https://doi.org/10.1016/j.jretconser.2015.08.010
Shaikh, A., Biswas, S.N., Yadav, V. & Mishra, D. (2017). Measuring fairness in franchisor-franchisee relationship: a confirmatory approach. International Journal of Retail & Distribution Management, 45(2), 158-176. https://doi.org/10.1108/IJRDM-11-2015-0174
Shaikh, A., Sharma, D., Vijayalakshmi, A., & Yadav, R. S. (2018). Fairness in franchisor–franchisee relationship: an integrative perspective. Journal of Business & Industrial Marketing, 33(4), 550-562. https://doi.org/10.1108/JBIM-04-2017-0093
Shockley, J., & Turner, T. (2016). A relational performance model for developing innovation and long-term orientation in retail franchise organizations. Journal of Retailing and Consumer Services, 32, 175-188. https://doi.org/10.1016/j.jretconser.2016.06.013
Voss, K. E., Tanner, E. C., Mohan, M., Lee, Y. K., & Kim, H. K. (2019). Integrating reciprocity into a social exchange model of inter-firm B2B relationships. Journal of Business & Industrial Marketing, 34(8), 1668-1680. https://doi.org/10.1108/JBIM-07-2018-0219
Downloads
Published
How to Cite
Issue
Section
License
The authors hold the copyright to their article and grant the Journal of Accounting, Management and Governance the exclusive rights of first publication (including communication to the public and reproduction), with the work simultaneously licensed under the Creative Commons Attribution Non-Commercial 4.0 International License (CC BY-NC).
This license allows third parties to remodel, adapt, and create from the published work, as long as it is for non-commercial purposes, giving due credit for authorship and initial publication in this journal.
Authors are permitted to enter into additional separate agreements for non-exclusive distribution of the version of the work published in this journal (e.g., publish in an institutional repository, on a personal website, publish a translation, or publish a book chapter), with acknowledgment of authorship and initial publication in this journal, provided there is no commercial use/distribution.
