Opportunistic behaviors in franchise chains: the role of cohesion among franchisees

Abstract

Abstract This paper explores social processes between franchisees as a way to control franchisee opportunism. Based on the literature of socio‐psychological and interorganizational relationships, we argue that cohesion among franchisees is negatively associated with opportunistic behaviors that are potentially harmful to the whole chain. We use multilevel and multisource data to show that perceptions of cohesion among franchisees relate both to a) how franchisees apply know‐how from franchisors (i.e., deviation from chains standards), and b) whether they transfer or withhold information that could be useful to the franchise system (i.e., information withholding). Our results underscore the importance of relationships among franchisees, an underexplored component of franchising. Copyright © 2010 John Wiley & Sons, Ltd.