體制理論下的創業家精神 - 以台灣麥當勞為例

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(1)Entrepreneurship in the Franchise Institution –the Case of Taiwan McDonald’s. by Wei-Ting, Sun A Thesis Submitted to the Graduate Faculty in Partial Fulfillment of the Requirements for the Degree of. MASTER OF BUSINESS ADMINISTRATION Major: International Human Resource Development. Advisor: Chu-Chen Rosa Yeh, Ph.D National Taiwan Normal University Taipei, Taiwan July, 2013.

(2) ACKNOWLEDGEMENT. First, I would like to thank all the faculty members of IHRD. Thanks for Lynn and Sandra, the assistants of IHRD, helped me a lot when I was a teaching assistant and of course all other things in the studying periods. Thanks for all the professors of IHRD, Dr. Chang, Dr. Lai, Dr. Yeh, Dr. Tsai, Dr. Shih, and Dr. Lin, they taught me the knowledge of this field, the skills to write academic papers and the right attitude to face the future changes. Second, I would like to thank my advisor, Dr. Yeh, and committee members, Dr. Tsai, Dr. Chang and Dr. Chao, for their guidance, mentorship, instructions, advises and correction to help me finish my thesis. I would especially thank to Dr. Chang, asked to be my committee member in a sudden in the summer vacation and gave me qualitative-related advice for my research. Finally, I need to thank my parents for supporting my master studying procedure. They support and help me not only in financial but also in the research process. They encouraged when I faced difficulties and helped me find out the solution. Without them, I could never finish my master studying..

(3) ABSTRACT. Franchise system is widely used and some franchises are very well-known in the market. Some franchise stores are under strict regulations of the headquarters to operate exactly the same way as the direct-management stores. However, since the franchise stores are run by the franchisees who are business owners that may possess a higher degree of entrepreneurship than managers of the direct-management stores, it is interesting to explore how these franchisees behave under an institutionalized franchise environment. This research adopted the qualitative approach to explore the issue of entrepreneurship in the franchise institution. Literatures on institutional theories, franchise systems, and entrepreneurship were reviewed. Then, the researcher conducted interviews with the franchisees of McDonald’s in Taiwan to gather information on their operation. The analysis of qualitative data focused on finding differences between the franchise stores and the McDonald’s institution, how these differences came from, and how the franchisees thought about these differences. The research found many differences between franchise stores and the McDonald’s institution, and concluded with 5 propositions. The research showed that although these franchisees did follow the regulations of the headquarter, they treated employees more like family members, placed heavy emphasis on profit, valued local community relationship, and had higher autonomy on business plans and store management. That is, these store owners acted more like “frantrepreneures” when operating under the franchise institution.. Keywords: Institutional Theory, Entrepreneurship, Franchise, Frantrepreneur I.

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(5) TABLE OF CONTENTS Abstract……………………………………………......….……......... I Table of Contents…………………………………………….……… III List of Tables…..…………………………………………………….. V List of Figures..………………………………………….…………... VII CHAPTER I INTRODUCTION…………….………….………..... 1 Background of the Study……………………………….………….………... 1. Statement of the Problems……………………………….………….……… Research Purpose…………………………………………………………... Research Question………………………………………………...…..……. Significance of the Research…..…………………………………….…….... 3 4 4 5 7. Chapter II. LITERATURE REVIEW……………………………....…….. Franchise…………………………………………………………...………. 7 Institutional Theory……………………………………………………....… 8 Isomorphism………………………………………………………….…….. 11 McDonald’s…………………………………………………………..…….. 14 Entrepreneurship…………………………………………………..……….. 17 Frantrepreneur……………………………………………………………..... 21 CHAPTER III METHODOLOGY…………………………………..….. 23 Research Framework…………………………………………………….…. 23 Research Procedure………………………………………………..……..… 25 Research Methods……………………………………………………...…... 26 Sampling Criteria…………………………………………………………... Research Participants……………………………………………………..... Data Collection…………………...………………………………..….......... Instrument…………………………………………………………..………. Data Analysis………………………………………………………………... 26 27 29 30 33. Research Quality…………………………………………………………… Coding Scheme……………………………………………………………... 35 36 CHAPTER IV FINDINGS AND DISCUSSION………….……......... 39 Entrepreneur Aptitude Scale………………………………………………... 39 Franchise Contract………………………………………………………….. 41 Managerial Function……………………………………………………….. Business Function………………………………………………………….. Personal Value……………………………………………………………… Discussion…………………………………………………………………... CHAPTER V. CONCLUSIONS……………………………………….. III. 43 56 70 78 86.

(6) Conclusion………………………………………………………………….. 86 Additional Finding…………………………………………………………. 89 Implication…………………………………………………………………. 89 Limitation…………………………………………………………………... Future Research Suggestions……………………………………………….. 91 92 REFERENCES….….……………………………………………….. 94 APPENDIX A: INTERVIEW QUESTIONNAIRE…..…..….…….... 97 APPENDIX B: EXAMPLE OF CONTEXT CODING……..……..... 100 APPENDIX C: EXAMPLE OF DIMENSION CODING……....…... 101 APPENDIX D: EXAMPLE OF CONCLUSION CODING………... 102 APPENDIX E: EXAMPLE OF PROPOSITION……....…...………. 103. IV.

(7) LIST OF TABLES Table 2.1. Three Pillars of Institution…………………………………….. 11. Table 2.2 McDonald’s Institutional Behavior…………………………… Table 2.3 Five Elements of Entrepreneurship…………………………… Table 3.1 Profiles of Participants……………………………………….. Table 3.2 Questionnaire Questions……………………………………… Table 3.3 Chinese Entrepreneur Aptitude Scale…………………………. 17 20 28 31 33. Table 3.4 Sample of Coding Process……………………………………. Table 4.1 Result of Entrepreneur Aptitude Scale….…………………….. Table 4.2 Findings in Planning Dimensions…………………………….. Table 4.3 Findings in Organizing Dimensions………………………….. Table 4.4 Findings in Leading Dimensions…………………………….... 37 40 46 49 53. Table 4.5 Findings in Controlling Dimensions………………………….. Table 4.6 Findings in Production Dimensions…………………………... Table 4.7 Findings in Marketing Dimensions…………………………… Table 4.8 Findings in Human Resource Dimensions…………….……… Table 4.9 Findings in R&D Dimensions…………………………………. 55 57 60 65 67. Table 4.10 Findings in Finance Dimensions……………………………. Table 4.11 Findings in Value Dimensions………………………………. Table 4.12 Supporting Findings of Proposition 1………………….……. Table 4.13 Supporting Findings of Proposition 2………………….……. Table 4.14 Supporting Findings of Proposition 3…………………….….. 70 78 80 81 82. Table 4.15 Supporting Findings of Proposition 4……………………….. Table 4.16 Supporting Findings of Proposition 5……………………….. Table 5.1 Answers for Research Question 1…………………………... 83 84 86. V.

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(9) LIST OF FIGURES Figure 2.1. Research framework……………………………………...…………. 23. Figure 2.2 Research procedure……………………………………………….…. 25. VII.

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(11) CHAPTER I. INTRODUCTION. Background of the Study In the globalization era, franchise companies are very common within every country in the world. There are various franchise companies from the western society that are currently operating in Taiwan. Among all the industries, the fast-food industry has the closest connection to people’s daily life. When it comes to franchise companies, people easily think of the identical signboard, television advertisements, trade name or trade mark, productions, tasting, services and so on. Generally speaking, most people have this kind of stereotype because these franchise companies have well-organized business structure and well designed business model. Scholars gave this kind of companies a definition --institutions. Institutional system brings several advantages to franchise companies and helps them to create more value. On the other hand, compared to franchise stores, most companies in Taiwan are small and medium enterprises (SMEs). There exists a characteristic among owners of SMEs which makes these companies successful. These owners are called “entrepreneurs”, and the characteristic “entrepreneurship”.. Entrepreneurship drives. owners to create new companies, to innovate and renovate, to pursuit more profit, to chase and grasp opportunities. In brief, entrepreneurship is one of the key successful factors within Taiwan SMEs. Since the entrepreneurship is important, business owners tend to develop entrepreneurship or recruit employees with entrepreneurship. Moreover, franchise stores also start to pay more attention on entrepreneurship and try to take advantage of it. For example, some franchise companies take entrepreneurship into consideration while choosing their franchisees. 1.

(12) No doubt, McDonald’s is the leading company in the fast-food industry and has been one of the most famous companies all over the world. At the same time, McDonald’s owned the most systematic franchise system within its organization structure. Because of the complete business model, McDonald’s has been regarded as a very well-structured company with strict and clear standard of procedure, or can be called an institution, meaning that all stores within the structure should look the same. Therefore, McDonald’s gave most people the impression as a serious, relatively bureaucratic and rigid institution without flexibility. Indeed, that is the image McDonald’s wants their customers to have about McDonald’s high quality products and good customer services. However, most people do not know there are differences within all McDonald’s stores and just regard all stores as identical. After studying the structure of McDonald’s, the researcher realized that there is another kind of operation model under the famous brand, the franchise stores. The franchise stores are not owned by McDonald’s managers, but by the franchisees. Franchisees are not like normal McDonald’s managers who only need to follow orders. Franchisees are the bosses of their stores and are responsible for the survival of these stores. More than 10 years ago, McDonald’s publicly recruited franchisees, and that was the first time McDonald’s recruited outside franchisees. As a result, for those people who were interested in McDonald’s, it was a great chance to start a new enterprise. People who start a new enterprise are known to possess many commonly known special characteristics, such as risk-taking, profit-seeking, opportunity-seeking, etc. Generally speaking, people with those characteristics are called “entrepreneurs”.. 2.

(13) Statement of the problems As above mentioned, McDonald’s is a highly institutionalized enterprise and well-known for its strict and clear regulations and procedures, so the employees of McDonald’s must obey the regulations and have no space to make any modification in doing their jobs. On the other hand, since the franchisees recruited by the McDonald’s are entrepreneurs, they may also show entrepreneurship in their operation. For example, entrepreneurs want to control their stores and listen to no one else; or entrepreneurs decide what products to be sold and also in what price. In brief, entrepreneurs should be totally free to do anything they want in their stores. Since these franchisees are entrepreneurs, they may want to behave like entrepreneurs in their stores. In contrast, McDonald’s is a highly institutionalized enterprise with strict regulations; it must not allow behaviors violating regulations. How could the McDonald’s tolerate these franchisees with entrepreneurships? How could these franchisees endure the strict bureaucratic environment of the institutionalized enterprise? Naturally, there must be conflicts between franchisees and McDonald’s, and the conflicts may result in some differences. As a result, the researcher was very interested in what differences exited in the franchise stores, how these differences were shown and what were the reasons causing these differences in such a well-developed and long-established system, and what would those differences affect franchisees’ managerial decisions and policies. Meanwhile, the researcher also tried to find out the compliances within franchise stores in the McDonald’s system and the reasons or theories to support these compliances.. 3.

(14) Research Purpose Franchise system is widely used and some are very well-known in daily life, from high class restaurant to shops and stores in the night market. It has also been tested, used and modified in McDonald’s for more than 50 years. Unfortunately, it is difficult to identify a franchise store only by the appearance or a short-time experience; therefore, the advantages, disadvantages, benefits and shortcomings of a franchise system are not well-recognized. This research contacted the franchisees of McDonald’s to gather information about the differences in franchise stores, where these differences came from, and how the franchisees thought about these differences. At the same time, the researcher asked these franchisees to talk about their own personalities, thought patterns and decision making processes, as well as their opinions and reactions to the instruction from McDonald’s headquarter. The researcher tried to explore the entrepreneurship under the Institutional Theory. After analyzing the information, the research provided the practical pros and cons of franchise system in this institution, the strengths and weaknesses of franchise stores of McDonald’s, the influence of entrepreneurship on the franchise stores, and suggestions to the McDonald’s development.. Research Questions 1.. What behaviors or policies in franchise stores are in compliance to the regulations of the McDonald’s institution?. 2.. What behaviors or policies are different between McDonald’s institutions and franchise stores under the institutionalized structure?. 3.. How do these differences come from under the institutionalized structure of McDonald’s? 4.

(15) 4.. Whether the franchisees have the characteristic of entrepreneurship?. Significance of the Research The research contributed to both academic field and the business field. In terms of the academic field, the research applied and investigated the co-existence of the institutional theory and entrepreneurship theory. The research also compared practical business behaviors in the franchise stores, presenting the identical and different behaviors. For the business field, the research conclusions could help understand what and how policies and behaviors of franchise stores were different. The conclusions also help analyzes one of the probable reasons of these differences, the entrepreneurship. McDonald’s headquarter may utilize the research findings as a reference or standards for choosing the next franchisees.. 5.

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(17) CHATER II LITERATURE REVIEW This chapter aimed to provide relevant literature regarding to franchise system, institutional theory, isomorphism, McDonald’s regulation, entrepreneurship, and frantrepreneurship.. Franchise According to International Franchise Association (IFA), franchise is a continuous relationship between “franchisor” and “franchisee”. Franchisor provides franchisee the privilege and assistance on organizing, training, purchasing and management; on the other hand, franchisor asks franchisee for equal cost as reward. The initial concept of franchise was that a company developed new products and the company wanted to establish reliable and efficient sale network. Therefore the company chose some contracted stores to sell its products, and also gave these stores the privilege to use its company brand name and relative producing and selling skill, training and support. Since the relationship between the company and contracted stores as based on contract, the contract was called “franchise contract”, and the derived marketing system was called “franchise system”. In this research, McDonald’s will be the franchisor, and the owner operators will be the franchisees.. American Franchise System America divided its franchise system into two main categories: one is Product and Tradename Franchise, and the other is Business Format Franchise. 1. Product and Tradename Franchise Product and Tradename Franchise is the earliest developed franchise type. Franchisee is like the agent of franchisor and obtains the supply of goods and usage of 7.

(18) trade mark. Franchisee only sells products of franchisor; at this time, franchisor has great autonomy on business operation. 2. Business Format Franchise Business Format Franchise is the new and fast-developed franchise type. Franchisor provides franchisee one set of complete business operation plan or business model to help manage and operate the franchise store. The business operation plan draws up step-by-step and detailed operation procedure (including marketing strategies, quality control standard operation procedure and so on), latent managerial problems and decision making principles. Besides tangible products and financial guidance, franchisor also needs to provide invisible trade mark and managerial talents training. Meanwhile, franchisee must give franchisor equal rewards. Generally speaking, there are two expenses: 1. Franchisee fee: In the beginning stage of opening the new store, franchisee must pay a fixed amount of expense to franchisor. 2. Royalties: Monthly, franchisee must pay a fixed rate amount of store total sales revenue to franchisor. For examples, McDonald’s and 7-ELEVEN are the representatives of this type. According to above mentioned, the Business Format Franchise shows obviously the intention for franchise stores to have the identical business structure, operation procedures, behavioral standards, and so on. In theory, the intention is based on institutional theory.. Institutional Theory Institutional theory emphasizes that pressure put on organization from the society and culture would affect organizational practices and structure (Scott, 1992). Oliver (1991) considered that organizations would produce following behaviors while facing 8.

(19) institutional pressure: organizational choices would be limited by environmental pressure outside, organizational survival rely on correct response to environment demanding, organizational searching for legitimacy, and organizational movement forced by environmental benefit. In brief, institutional theory is the process of institutionalize, forcing environment to pour its value into the organization; while facing the demand, organization tends to pursuit the legitimacy qualified by the institutional environment, and then adjust its strategy according to match the demand (Scott, 1992). Scholars in various time period, space and environmental characters would encounter different level or even conflicting institutionalization effect in different development stage. As a result, scholars developed traditional institutional theory and neo-institutional theory.. Traditional Institutional Theory Selznick (1949) first brought out the idea of institutional theory, claiming that institutionalization is a process, and organization would adjust itself through the time to reflect organizational unique history and values created. He believed that under the premise of interaction and accommodation with the environment, organization would try to display its characters and competences to ensure its stability and orderliness. Based on Selznick’s idea, Stinchcombe (1968) proposed that institution played the role of agent and power, meaning that institution was the way vested interests used to gain value and benefit. They emphasized that having the preservation of values and maintenance of benefit could make they own and keep their power. Silverman (1971) was the important person who advocated using institutionalization in organizational research in the early stage.. 9.

(20) Neo-Institutional Theory Two articles of Meyer & Rowan (1977), “institutionalized organizations: formal structure as myth and ceremony” and “the effects of education as an institution”, formally lead to neo-institutional theory. Neo-institutional theory gradually enlarged the discussion scope, regarding organization as a complex compound of various institutions, crossing broader boundary, focusing on how organization response to conflicts through accurate designed structure, and maintaining stable authority and rationality. Under this premise, the neo-institutional theory considered about how to decrease the difference between organizations and why organizations were similar to each other. DiMaggio & Powell (1983) mentioned that there were competitive or other relationships existed between many organizations within the environment. Organizations in the same environment, facing the same regulative and value system, would have similar behaviors response to stress from environment or other organizations. The process of being more and more similar was called “isomorphism”. As a result, isomorphism was a limitation procedure, forcing single unit of the group to imitate other unit while facing the same environment. Scott (2001) concluded that once organizations obtain support of regulative managing institution and qualification of statutory institution, they could survive more easily.. 10.

(21) Isomorphism Scott (2001) pointed out there were three factors to construct the isomorphism, and these three factors were seen as three pillars of institution. Table 2.1 showed these three pillars.. Table 2.1 Three Pillars of Institution Pillar Regulative. Normative. Cultural-Cognitive. Base of compliance. Expedience. Social obligation. Taken-for-grantedness Shared understanding. Basis of order. Regulative rules. Binding expectation. Constitutive schema. Mechanisms. Coercive. Normative. Mimetic. Logic. Instrumentality. Appropriateness. Orthodoxy. Indicators. Rules Laws Sanctions. Certification Accreditation. Common beliefs Shared logics of action. Basis of legitimacy. Legally sanctioned. Morally governed. Comprehensible Recognizable Culturally supported. Adapted from “Institutions and organizations,” by Scott, W. R., 2001. Copyright 2001 by the Sage Publications.. Regulative Pillar Overview the past literature, most researches about institution emphasized on the regulative pillar, which might restraint and regulate organizational behaviors (Scott, 2001). Scholars accentuated this pillar, such as how regulations were established, how to supervise organization, and how to impose sanction against organization. The procedure of regulation contained the ability to establish regulation, check the organization conformity and sanction behaviors. Besides formal regulations or laws, the procedure also relied on informal system, such as social customs. 11.

(22) Normative Pillar Scott (2001) believed that in the normative pillar, normative rules contained stipulations, evaluations, obligations of social life and also social values. This pillar defined the organizational goals and pointed out appropriate solutions to follow. The values here represented the way how people like or desire, and provided the existing structure a standard to evaluate or compare with. In the past organizational literature, scholars claimed that organizations would follow the rules of external environment. Selznick(1949) pointed out that external rules would not only force organizational goal or value change, but restrained interpersonal relationship. March & Olsen(1989) also found out that organizational behavior would tend to follow external rules and match external demand.. Cultural -Cognitive Pillar Scott (2001) thought that cognitive was a concept of sharing, formed by a meaning identified by most people, and could compose the nature and structure of the society. The meaning was with the characters of transforming and maintaining. The meaning existed because of the annotation made by most people to explain some happening events. Therefore, when organizations felt the institutional pressure from the society, organizations would try to follow and change organizational structure and behaviors. Besides, DiMaggio & Powell (1983) raised that the managerial decisions would be strongly affected by three institutional mechanisms: coercive isomorphism, mimetic isomorphism and normative isomorphism. These mechanisms create and transfer common value, regulation and rules, then form the same practices and structures.. 12.

(23) Coercive Isomorphism Coercive isomorphism came from formal or informal pressure of other organizations. The pressure might come from expectation or demanding of other organizations, or stress from local government, such as operation system and law regulations. The stress might be a power, a exhortation, a persuasion or an invitation to join. In some environments, organization would change because of government command.. Mimetic Isomorphism Not all organizational isomorphism came from regulative isomorphism. While facing uncertainty, such as lacking of technologies or vague goals, organizations would show mimetic behaviors to imitate useful activities from other organizations. To reduce the uncertainty, organizations tend to imitate the successful organization in the same environment. Imitative behaviors could save cost and time of searching for solutions. The purpose of imitating was not only for efficiency or effects, but legitimacy on organizational behaviors and social identification.. Normative Isomorphism The isomorphism came from the pressure to achieve professional standardization. Professional standardization would help organization form the technology or managerial standard for employee education, interpersonal relationship and recruitment and selection. From scholars’ view points, institution was the common value and belief of most people in the society, and was embedded in the society structure. Institutionalization was the process of organization change, affected by the external environment. Based on DiMaggio & Powell (1983) research, organizational structure would change to 13.

(24) response to some rules and customers. For legitimacy, organizations produced isomorphism. Following research would take these three factors: coercive, mimetic and normative isomorphism, as the analysis tools.. McDonald’s According to McDonald’s official website, McDonald's is the leading global foodservice retailer with more than 32,000 local restaurants serving more than 60 million people in 117 countries each day. More than 75% of McDonald's restaurants worldwide are owned and operated by independent local men and women.. Unique Philosophy McDonald’s wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation. To achieve this, McDonald’s chose a unique path: persuading both franchisees and suppliers to buy into its vision, working not for McDonald’s, but for themselves, together with McDonald’s. McDonald’s promoted the slogan, “In business for yourself, but not by yourself.” McDonald’s philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s, the second, the franchisees, and the third, McDonald’s suppliers. Following the philosophy, McDonald’s pay great attention on choosing proper franchisees who could cooperate with McDonald’s. To find out these franchisees, McDonald’s established its own franchise system.. 14.

(25) World Class Training McDonald’s continues to be recognized as a premier franchising company around the world. McDonald’s believe a major component of this is the world class training what the franchisee receive prior to becoming an owner. McDonald’s provides hands on training and the materials the franchisee need to be a success in restaurant business. McDonald’s franchising system is built on the premise that McDonald’s can be successful only if its owners are successful. McDonald’s believe in a partnering relationship with McDonald’s owners, Suppliers and Employees. This relationship begins with world class training. McDonald’s training program is the best in the industry. Franchisee will become an operational expert focused on providing an outstanding experience for McDonald’s customers every day. Some highlights of training include: 1. 9 – 18 months training in a restaurant close to your home 2. Self directed, part time – 20 hours per week 3. Seminars, conferences, one-on-one training sessions 4. Success based on competency 5. Operator training classes conducted by local training professionals 6. Two advanced 5 day courses at the Fred L. Turner Training Center at Hamburger University, Oak Brook IL. McDonald's Field Operations and Franchising staff work directly with franchisee from the moment entering the training program. The primary job of the Field Operations staff is to assist the owners maximizing Quality, Service and Cleanliness which help franchisee optimize sales and profits.. 15.

(26) Support System Being a McDonald’s owner, McDonald’s offers many advantages – from the training, and the support of a solid organization, to the opportunity to own a thriving and successful business. Essentially, here’s what franchisee receives while becoming a McDonald’s owner: 1. To own the business and receive the rewards that come from being responsible for the success. With McDonald’s unique approach to training and support, the franchisees are in business for themselves, but not by themselves. 2. The usage of the trademarks and operating system of the number one brand in the world. 3. The tools to help franchisees in their business: local and national support in the areas of operations, training, advertising, marketing, human resources, real estate, construction, purchasing, and equipment purchasing and maintenance. To be responsive to franchisees’ needs and in support of a collaborative business environment, McDonald’s maintains divisional and regional offices throughout the U.S., along with our home office in Oak Brook, Illinois. 4. The enjoyment that comes from working with people, from franchisees’ restaurant crew to franchisees’ customers and community. 5. The opportunity to contribute to the success of McDonald’s: Big Mac, Filet-O-Fish, and Egg McMuffin sandwiches have all been developed by owners. 6. Personal and business growth and satisfaction, both as an individual owner and as a member of McDonald’s respected worldwide organization. 7. Personal growth and business knowledge from McDonald’s extensive training and from your experience as an owner. Based on above information, the researcher could analyze McDonald’s franchise system and get the initial inference, as shown in table 2.2: 16.

(27) Table 2.2 McDonald’s Institutional Behavior Pillar Coercive. Behavior 1. personal characteristics and experience for franchisee candidates 2. partnering relationship with McDonald’s owner, suppliers and employees 3. identical producing equipments 4. world class training for franchisee 5. regulations of franchise system. Normative. 1. usage of the trademarks and operating system 2. local marketing program and advertisement 3. manuals of standard operation procedure 4. manuals of in-store management 5. identical advertisements, menu and display boards. Obviously, it is easier to find isomorphism information, through internet or observation, for the coercive pillar and normative pillar, but difficult to find the behaviors and policies about mimetic pillar. However, based on literatures, there should be some mimetic isomorphism within a company. As a result, the researcher puts more attention finding out mimetic behaviors and assumes those behaviors might be influenced by franchisees’ entrepreneurship. Entrepreneurship might also be the most influential factor of these differences between McDonald’s institution and franchise stores in this research.. Entrepreneurship The word “entrepreneurship” came from 12th century French “entreprendre”, meaning “undertake”. Three centuries ago, French classical economist first defined “entrepreneur”, but the definition often changed following the business concept; therefore, there was not a final conclusion (Brockhaus, 1981). 17.

(28) Entrepreneurship had been defined using a behavioral definition; for example, the creation of new organizations (Gartner, 1989). A frequently used behavioral definition of entrepreneurs referred to independent ownership, active management, and expressed intention to do so (Stewart & Roth, 2001). Other definitions of entrepreneurship described tasks, such as the recognition and exploitation of opportunities, as central to entrepreneurship (Shane & Venkataraman, 2000). Entrepreneurship was a multifaceted phenomenon that attracts increasing attention from researchers in various disciplines. Although the boundaries of the entrepreneurship field continue to be highly permeable, there was evidence of a growing body of entrepreneurship articles in management journals that could lend support to the view that entrepreneurship was emerging as a distinct domain (Busenitz et al., 2003). Sharma & Chrisman (1999) generalized many scholars’ statement, concluded that entrepreneurship contained all activities involved in and out of organization, including forming a new organization, innovation and renovation. Entrepreneurship reflected how organization tended to invest in innovative, proactive, risk-taking, autonomous and competitively aggressive behaviors, while achieving its own goal (Dess & Lumpkin, 1996) Covin, Slevin & Schultz (1994) mentioned that entrepreneurial strategic posture was composed by three behaviors: Executive’s risk-taking attitude toward uncertainty, Product innovation tendency ,and Positive and active competition. Pitt & Kannemeyer (2000) suggested while studying entrepreneurship, researcher shall study not only personal characteristics but the behaviors and its influence. They interpreted entrepreneurship in three dimensions: Intolerance of ambiguity, Locus of control and Risk-taking propensity. 18.

(29) Studies have explained and categorized the following types of entrepreneurs: nascent, novice, habitual, serial, and portfolio (Westhead & Wright. 1998: Wright, Westhead, & Sohl 1998: Delmar & Davidsson, 2000). Nascent entrepreneurs were individuals without previous business ownership experience. Habitual entrepreneurs were people with business ownership experience. Serial entrepreneurs were people who sold or closed their businesses but owned another business once again. Portfolio entrepreneurs were individuals who own their businesses now and gain another new business afterward. Shapero (1984) distinguished between entrepreneurs and managers; in that, entrepreneurs had to share the risk of success or failure and manage the organization with a certain degree of autonomy. Entrepreneurs were at the center of ‘‘entrepreneurial events’’ which include a number of entrepreneurial activities and individuals. One perspective considered entrepreneurial activities as those leading to the discovery, evaluation and exploitation of opportunities to create future goods and services (Venkataraman, 1997; Shane and Venkataraman, 2000). The defining characteristic of this perspective was an emphasis on the centrality of opportunity identification (Eckhardt and Shane, 2003; Shane and Venkataraman, 2000). The other perspective defines entrepreneurship as the process of creating new organizations (Gartner, 1988; Katz and Gartner, 1988), which occured as a context-dependent, social and economic process (Aldrich, 2005; Low and Abrahamson, 1997). These scholars emphasized the linkage between entrepreneurship and organization creation. 19.

(30) Entrepreneur Aptitude Recently, scholars emphasized on entrepreneurial events, and redefined entrepreneurship as “creating new business”, bringing an identical perspective while discussion. Wu & Chen (2004) reviewed and organized past. literatures about. entrepreneurship, and generated the definition of entrepreneurship. Besides “creating new business”, after reviewing past literatures (table2.3), Wu & Chen generated five elements: 1. able to create and innovate 2. able to carry on during uncertainty and be risk-taking 3. able to see and grasp opportunities 4. eager to pursuit profit 5. able to show personal character. Table 2.3 Five Elements of Entrepreneurship Five Elements Scholar. Year. #1. #2. #3. Carson. 1998. V. V. V. Moon. 1999. Sharma & Chrisman. 1999. Slater & Narver. 2000. Pitt & Kannermeyer. 2000. V. Erikson. 2001. V. Michael. 2001. Singh. 2001. V. V. Dollinger. 2002. V. V. #4. #5 V. V V. V. V. V. V. V V. V. V. V. V V. V V. Adapted from “An Empirical Study on the Construction of Chinese Entrepreneur Aptitude Scale,” by Wu, I.H, & Chen, C.S. (2004). Paper presented at the meeting of Industrial Technology Research Institute, Taipei, Taiwan. 20.

(31) Frantrepreneurship Sundbo et al. (2001), analyzed innovations in service chains that were going international, defined the frantrepreneur as “a franchisee who innovates by adapting a standard service concept to meet local conditions”. They highlighted the roles of the frantrepreneurs in the innovation process but concluded that their innovations were mostly in the form of small and incremental changes. Russell (2003) mentioned that a frantrepreneur is the cross between a traditional entrepreneur and the traits needed to be a modern franchiser owner. He indicated that a frantrepreneur is one possessing the desire to be a business owner without the desire to recreate the wheel, with the ability to follow a proven business system for the benefit of personal owner. The term frantrepreneur grasped the activities and personality of a franchisee who reshapes and innovates within the franchise system for a new local environment. The frantrepreneur would not accept the norms of the operation but try and make incremental improvements and innovations.. 21.

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(33) CHAPTER III. METHODOLOGY. In this chapter, the researcher introduced how the research was conducted. The chapter contained the research framework, research procedures, research methods, research samples, data collection procedures and coding procedures.. Research Framework This research compared policies and plans of franchise stores with the standard actions guided by the headquarter regulations. This research tried to find out, under the institutionalized structure, what differences existed in the franchise stores. Figure 3.1 showed the research framework.. Figure 3.1 Research framework. 23.

(34) The overlapping part represented compliances to the policies and plans which were affected by the institutional theory. The non-overlapping part in the franchise stores circle represented policies and plans that franchisees developed on their own. The non-overlapping part in the McDonald’s Headquarter circle represented the policies and plans that franchisees did not follow. To understand the basic principles of these stores, the researcher put focus on managerial functions, business functions and interviewees’ personal values.. 24.

(35) Research Procedure The researcher first analyzed the research background and then identified the research topic, the similarities and differences existed in the franchise stores. Then the researcher studied literatures about the franchise system, institutional theory, McDonald’s regulations, entrepreneurship, and frantrepreneurship to form the research questions. After the questionnaire was ready, the researcher conducted the interviews. All narratives were transcribed, coded by the coding scheme, and finally analyzed to get the findings. Conclusions and suggestions were given based on the analysis results. Figure 3.2 shows the research procedures.. Identify Research Topic Review Literature Identify Research Questions Develop the Framework of the Research Develop the Interview Questionnaire Interview and Collect Data Code and Analyze Data Report Findings Provide Conclusions and Suggestions Figure 3.2 Research procedure. 25.

(36) Research Methods The research was a qualitative research. The researcher conducted interviews to collect data. During the interviews, oral conversation were recorded and then transcribed. Besides, there was a Chinese Entrepreneur Aptitude Scale for interviewees to fill out. The scale was later used to analyze franchisees’ level of entrepreneurship. After data collection, narratives in the transcript were coded, categorized and generalized. Finally, the researcher made the conclusions and provided suggestions.. Sampling Criteria The criteria for subject selection were based on the purpose of this research. The franchisees of McDonald’s were the population of this research. Since the research put focus on finding out differences and similarities of franchise stores, the researcher used the criteria as the following. 1. Participants must be the franchisees of McDonald’s. 2. Participants must have no working experience in McDonald’s before they joined the franchise system. 3. Participants must have rich working experiences before they joined the franchise system so that they have enough knowledge of other business establishment to answer the research questions. 4. Participants must have their own stores. Their stores must be normal operation type, like the stores located on the roadside.. 26.

(37) Research Participants As above mentioned, the interviewees were franchisees of Taiwan McDonald’s. There were 13 franchisees in Taiwan at the time of this research. Within these 13 franchisees, 4 franchisees were promoted from within McDonald’s direct management system. Therefore they were well-trained and worked under the system for quite a long time. They must be very familiar with McDonald’s policies, but might not have their own unique thinking or behaviors. In brief, they might not have the characteristics of an entrepreneur as the other nine franchisees. Since the research emphasized on the entrepreneurship, the researcher could only conduct interviews to these nine franchisees. However, one of these nine franchisees owned different type of restaurant, which was in the food court of a hypermarket. With this special business type of restaurant, the franchisee must have different operation methods from the other eight franchisees. Therefore the researcher considered this franchisee not suitable for this research. Those eight franchisees did not work in McDonald’s before they joined the franchise system, and they had rich working experience as managers or owners. Some interviewees even used to start their own enterprises, so they were adequate samples for this research. Although there were only nine interviewees and they owned 16 stores out of 23 franchise stores in Taiwan, they represented the population in this case. Table 3.1 shows the profiles of the eight participants.. 27.

(38) Table 3.1 Profiles of Participants Interview No.. Age. Gender. A. 50. Male. B. 56. Male. Education. Time. Level. 59 minutes. Bachelor. 1hr. Bachelor. 1minute C. 50. Male. 58 minutes. Working Experience Before Franchise / Major Math Chemical. Franchising Seniority. Stores Owned. Information Industry /Manager 7 years. 12 years. 2. Energy Industry /Manager 20 years. 11 years. 2. Manufacture Industry /General manager 7 years. 9 years. 3. Tailoring Industry /Dealer 17 years. 10 years. 1. Manufacture Industry /Manager 20 years. 2 years. 1. 10 years. 3. < 1 year. 1. 12 years. 2. Position & Seniority. Engineering Master. Agricultural Economics. D. 52. Male. 1hr. Bachelor. 19minutes E. 50. Male. 40 minutes. Business Administration. Master. Engineering. 1.Shipping Industry /Second Mate 8 years F. 56. Male. 1hr. Bachelor. 26minutes. Merchant. 2.Franchisee of Noodle /Owner 2 years. Marine. 3.Franchisee of Bakery / Owner 3 years 4.Franchisee of Café / Owner 3 years. G. 40. Male. 1hr 10mins. Vocational. Mechanical. School. Material. Telecommunications Industry/ Owner 8 years 1. Electronic Industry /Sale Executive 5 years. H. 57. Male. 1hr 13mins. Military Academy. 2. Electronic Industry /General Manager 4years 3. Electronic Industry /Owner 8 years. 28.

(39) As shown in the table, most interviewees were older than 50 years old and had long working experience before joining McDonald’s, therefore interviewees might have their own thinking and opinions based on their past working environments. Interviewees’ education backgrounds are also provided as a reference, and the fact that they are very diverse shows that franchisees may not have been chosen based on education level. Working experience before participating the McDonald’s franchise represented the degree of influence from their previous jobs. For seniority of franchising, there were two interviewees in the franchise system for 12 years, meaning they were the first group of franchisees when McDonald’s started to recruit franchisees 12 years ago. To keep the interviewees anonymous, interviewees were given codes from A to H. Those interviews were held in their own restaurants; therefore the exact location of restaurant was hidden as well. All franchise stores were located in rural areas, since the headquarter did not give stores in urban areas to franchisees. In this research, those stores franchisees owned were clustered in middle Taiwan. The differences between urban areas and rural areas may be a limitation in this research.. Data Collection When the researcher is interested in the past event or how study subjects interpreted their environment, the interview is a good method to get necessary information. In this research, the researcher used the interview as the main method for data collection.. 29.

(40) Semi-structured in-depth interviews The interviews for this study were conducted face to face in each franchisee’s store. Interviews are classified into different types. For this research, the researcher chose the semi-structured interviews for its “openness” (Merriam, 2009, p.90), meaning that interviewees can fully express their own thinking and opinions towards the interview questions. Unlike structured interviews, in-depth interviews have a flexible and dynamic style of questioning and discussion directed toward understanding the significance of human experiences from the informant’s perspective. Interviews for this study were conducted in each franchisee’s store. All interviews were recorded with the informants’ permission, and later transcribed to provide accurate records for analysis. The Chinese Entrepreneurship Aptitude Scale was administered at the end of interview to assess the franchisee’s level of entrepreneurship.. Instruments Interview Questionnaire The interview questions were designed to investigate the fundamental policies and behaviors in each franchisee’s store, thus, the researcher decided to use “management function” and “business function” as the main aspects. Questions of management functions, including “planning”, “organizing”. “leading” and “controlling”, were used to understand how each franchisee react to the headquarter policies and organizational structure. Questions of business functions, including “production”, “marketing”, “human resource”, “research and development” and “financial management”, were used to find out unique or special policies and behaviors displayed in franchise stores. 30.

(41) For complete questionnaire questions, please check Appendix A. Table 3.2 shows some example questions:. Table 3.2 Questionnaire Questions Dimensions. Questions. Planning. The first step of planning is to do the forecast to make the directed plan; do you identify with the forecast from headquarter?. Organizing. Under the McDonald’s institution, is there any difference in franchise store?. Leading. Under the McDonald’s institution, what special leading behaviors do franchisees do?. Controlling. Under the McDonald’s institution, what special controlling mechanism do franchise stores have?. Production. Under the McDonald’s institution, is there any difference in production procedures and equipments?. Marketing. Under the McDonald’s institution, how do franchise stores implement the marketing plans?. Human Resource. Under the McDonald’s institution, are there any different considerations or reasons for recruitment?. Research & Under the McDonald’s institution, do franchise stores participate in Development research and development procedure? Finance. Under the McDonald’s institution, is there any difference in cost structure of franchise stores?. Chinese Entrepreneur Aptitude Scale The Chinese Entrepreneurship Aptitude Scale was developed by Wu & Chen (2004), published in a conference on Innovation and Technology Management held by the Industrial Technology Research Institute. The scale was designed to examine whether Chinese entrepreneurs match some entrepreneurial personality traits, proposed by western researches. The scale was used 31.

(42) to help subjects to understand themselves, estimate their fitness to start an enterprise. There were 56 items in the scale, measuring four conceptual dimensions: autonomic, social networking, innovative, and leading & communicating. The credibility and validity of the scale were good. The Cronbach α for these four dimensions were all over 0.8, meaning the scale had good internal consistency. Table 3.3 are some items of the scales:. Table 3.3 Chinese Entrepreneur Aptitude Scale Dimension Autonomic. Social Networking. Aspect. Item. Persistent. 1. I demand myself to perform better than others. 2. I am highly self-requested.. Social Responsibility. 1. I am willing to give feedback to the society and take social responsibility. 2. While facing failure, I usually review myself and try to learn something from the failure.. Autonomic. 1. I often oversleep. 2. I rarely delay in arrival.. Social Network. 1. Before making the decision, I usually consult with relevant people. 2. In social occasion, I can interact with others friendly.. Social Need. 1. I have tried various works with different characteristics. 2. I usually take participate in external organizational activities irrelevant to works. (continued). 32.

(43) Table 3.3 (continued) Dimension Innovative. Aspect. Item. Foresight. 1. I tend to think and solve problems in different angles. 2. I like to learn new skills and new solutions.. Ambitious. 1. I enjoy the satisfaction of finishing the work. 2. I feel satisfied if I persuade or affect others to obey my opinion.. Leading& Communication. Communication Ability. 1. I am confident with my opinions and ideas. 2. I am usually proud of my behaviors.. Interpersonal. 1. I can usually influence the atmosphere in a. Relationship. group meeting. 2. The meeting usually goes smoothly and efficiently with my participation.. Adapted from “An Empirical Study on the Construction of Chinese Entrepreneur Aptitude Scale,” by Wu, I.H, & Chen, C.S. (2004). Paper presented at the meeting of Industrial Technology Research Institute, Taipei, Taiwan.. Data Analysis Coding Since all data were collected through interview, they were all in transcribed and needed to be treated using qualitative analysis. For general coding procedures, Miles and Huberman (1994) provided the steps for qualitative data analysis as following: 1. Give codes to your first note from observation or interview. 2. Also record personal reflections or comments. 3. Categorize through the data to find out similar or different phrases, relationships between phrases, patterns and themes, and also common sequences. 4. Identify patterns, differences and commonalities. 5. Begin small generalizations covering the consistencies observed in the data. 6. Examine these generalizations of a formalized knowledge in the form of theories. 33.

(44) In addition to these general coding procedures, the researcher also followed other goal-directed coding methods. There are two coding methods used in this research: open coding and a priori code.. Open Coding Open coding is the part of analysis that fits specifically to naming and categorizing ideas through thorough reading of narratives (Strauss & Corbin, 1990). Open coding is a bottom-up coding method, which coding schemes are emerged from repeating themes in the narratives. Following this coding method, the narratives of this research were broken into separate and independent sentences which contained similar or different ideas, behaviors or personal thinking. Then the researcher gave each discrete idea, behavior or personal thinking a name or label, representing which dimension it belonged to.. A Priori Code The word “A priori” is Latin, meaning “from the former” or “from before”, and can refer to some knowledge known independent of any experience other than the experience of learning. Here in the coding scheme, it means that the researcher conducts the coding based on theories already reviewed and organized, not trying to generate new categories. In contrast with open coding, a priori code is the top-down method, following the specific existed coding schemes. In this research, the questionnaire was designed to discover the institutional and entrepreneurship behaviors; therefore the coding scheme would follow the theoretical constructs as specified in the theories. In this research, the researcher took both these two coding methods. Since the researcher has already studied the relevant literature to develop a clear research 34.

(45) framework, and designed the research questionnaire according to particular topics, the researcher used the A priori coding method to analyze these high level data, including the business function and managerial function. For those detail level data, the researcher used open coding to group compliances and differences within the narratives.. Research Quality The quality is critical for any research. In this section, the procedures that the researcher followed to ensure the quality of this research are described. The questionnaire questions were designed based on the research questions. The research focused on the compliances and differences in the franchise stores and wanted to know the initial reasons. Therefore, in the questionnaire, the researcher put focus on the foundation of operating an enterprise and being an owner, and then decided to choose business functions and managerial functions as the main framework to ensure that all data from the interviews matched with the research purpose. Then the questionnaire had been reviewed and revised by a group of academic experts to make sure the questionnaire could get the needed answers for this research. To increase the quality further, all the questionnaire questions were written in plain and ungarnished description due to interviewees’ education background. Since not all interviewees studied in the management field, if the questionnaire were written in the terminologies of business administration field, some interviewees might not clearly understand what the questionnaire asked and then gave wrong or non-related answers. All the interviewees were franchisees of McDonald’s and they were also the population in this research, therefore they were the most representative sample in this research. Interviewees were franchisees, meaning they had been trained by the McDonald’s headquarter, and also asked to work under McDonald’s institution for 35.

(46) one year according to the training procedure, so that they had enough knowledge and understanding about the McDonald’s institution. All interviewees were store owners and stayed in their stores most of the time, therefore they were very familiar with daily operational issues, and had enough information and experience to answer interview questions. Interviewees had rich working experience in other field before joining the franchise system, so they had formed their own unique thinking and characteristics to provide answers within these interviews. All these interviews were conducted in the same conditions to make sure there was no interference from outside environment. All interviews were conducted face to face by the researcher and each individual interviewee. All interviewees were asked the same questions the same way. The researcher asked every question in the questionnaire in all interviews and patiently listened to interviewees. Interviews took from 40 minutes to 1 hour and 26 minutes, depending on the length of individual interviewees’ response. All interview narratives were transcribed and checked carefully. Then, the researcher followed the same coding methods to analyze the transcribed data to ensure consistency in data analysis.. Coding Scheme The interview contents were transcribed into verbatim and carefully examined for the compliances or different behaviors or ideas comparing to the McDonald’s institution. After a behavior or an idea was identified, it was given a code number. The code was composed of one English character and two numbers. The English character represents the interviewee who mentioned the behavior or idea. The first number indicates in which pages of the transcript the behavior or idea appeared. The second number stands for the serial number of coding. Table 3.4 shows the process of coding (also see Appendix B). 36.

(47) Table 3.4 Sample of Coding Process Numbers Dimension of Coding A-02-05. Personal Value. Interview Content. My style is not like a business man. Although my principle now is to follow headquarter’s activities, I still have my own different opinion…many people still regard McDonald’s as unhealthy food, but in my restaurant, I demand my employees to adjust customers’ perspectives…for example I know some managers would not suggest customers to buy salads due to higher cost; but for me, I do not consider about that…not totally do not consider, but I think it is important to promote that we have healthy food in the restaurant is very important.. In the case, the researcher read the paragraph and found there were some ideas that might be important, so some key points within the paragraph were marked. The researcher judged that these opinions belonged to personal value so they were put into the dimension. The coding means that this concept is from interviewee A, page 2, and was the fifth key point within this interview. After pointing out all the key points and categorizing them into different dimensions, the researcher started to group all key points in the same dimension together (see Appendix C). When all key points were gathered together, the researcher started to analyze and combine them into findings of dimensions (see Appendix D). In this stage, the researcher also gave numbers to every finding in dimensions, such as P1 meaning the first finding in the planning dimension. After this process, there were 31 findings in 10 dimensions, 4 from management function, 5 from business function, and the dimension of interviewees’ personal value. Although these findings were extracted from different dimensions, some of them belong to the same theme, some belong to different themes. As a result, the researcher 37.

(48) further organized those findings with the same theme into one proposition, in order to generalize a formalized knowledge about these franchisees (see Appendix E).. 38.

(49) CHAPTER IV FINDING AND DISCUSSION This chapter shows the findings from the interview scripts and the questionnaires. As derived from the research purpose before, the researcher tried to figure out what these franchisees did in their own stores and why these franchisees performed those behaviors. The following are the results of the aptitude scale and the findings organized in dimensions of managerial function and business function.. Entrepreneur Aptitude Scale The scale was designed to examine whether Chinese entrepreneurs match some entrepreneurial personality traits, proposed by western researches. The scale was used to help subjects to understand themselves in terms of their entrepreneur aptitude, and to estimate their fitness to start an enterprise. After interviews, the researcher asked interviewees to answer the questionnaire, and entered the data into the scale. The results of these interviewees are shown in the table 4.1. The scores of Norm and Young Entrepreneur were from the literature, Wu & Chen (2004). Norm represented the population of that research, meaning 511 non-entrepreneur samples. Young Entrepreneur represented the subject of that research, including 27 young entrepreneur samples.. 39.

(50) Table 4.1 Result of Entrepreneur Aptitude Scale. Norm. Young Entrepreneur. Interviewees of Current Study. 3.94. 4.27. 4.53. 4.24. 4.39. 4.45. A3.Autonomic. 3.43. 3.57. 4.04. B1.Social Networking. 3.47. 3.79. 4.01. B2.Social Need. 3.14. 3.16. 3.25. C1.Foresight. 3.98. 4.01. 4.10. C2.Ambitious. 3.97. 4.13. 4.21. D1.Communication Ability. 3.58. 3.91. 3.98. 2.98. 3.28. 3.48. Dimension. Aspect A1.Persistent. Autonomic. Social Networking Innovative. A2.Social Responsibility. Leading& Communication D2.Interpersonal Relationship. Based on the table, the researcher found a few points worthy of discussion. 1.. Since the scale is already tested and proven to be effective, the high scores of interviewees prove that these research interviewees indeed possess high entrepreneurship.. 2.. In some aspects, B2 and C1, the gap between young entrepreneur and interviewees is much bigger than the gap between norm and young entrepreneur, meaning interviewees have quite different understanding in these two aspects. B2 measures how positive and extrovert the study subjects are. The possible reason for the difference between interviewees and young entrepreneurs might be ages and life experiences. In general, interviewees are older than the so-called young entrepreneurs; therefore interviewees already experienced much more in their lives, so interviewees naturally obtain higher scores in this aspect. 40.

(51) C1 measures the openness, curiosity and diversity in thinking of study subject. The possible reason for the difference between interviewees and young entrepreneurs might be working experience. Since all interviewee already succeeded in their works, interviewees had experience through that life stage, so interviewees get higher scores. 3.. In some aspects, A3 and B1, interviewees get much higher scores than young entrepreneurs’ scores, meaning there are some significant factors between interviewees and young entrepreneurs. However, after reviewing the questions of A3 and B1 again, the researcher found these factors might be age and working experience as well.. 4.. Although the scale had been tested and proven, due to its’ self-report quality, the scores might not accurately represent study subjects’ true situation, and then result in aberrant results. In brief, according to the scale, the researcher assumed that interviewees actually have a high level of entrepreneurship.. Franchise Contract To ensure franchisees had clear recognition to their rights and responsibilities to the franchise headquarter, McDonald’s signed the franchise contract with every franchisee. Within the contract, there were many clauses and sub-clauses giving definitions to events which were necessary to be confirmed by both franchisees and headquarter. Although the interviewees told the researcher that the franchise contract could not be revealed to other people, the researcher made some conjectures about the contract clauses based on the interview narratives and discussed with interviewees. The followings were the possible franchise contract clauses.. 41.

(52) 1. Franchisees must provide only specific foods and beverages, use specific equipments, strictly follow the standards of foods and beverages, and strictly obey the demanded standards of quality, service and cleanness. 2. To guarantee the execution of responsibilities based on the contract, franchisees must pay an amount of contract security deposit. Franchisees agreed to pay the royalty fee monthly and the franchise fee at the time signing the franchise contract. 3. The headquarter should provide operational consultations to these franchisees periodically or at the reasonable time franchisees require. The headquarter should communicate with franchisees about professional techniques, development, skills and improvements related to McDonald’s. 4. The headquarter should provide business operation procedures and regulations to franchisees. The content might include and not limited to: product producing procedures, operational policies, human resource policies, accounting policies, etc. 5. The headquarter should provide franchisees the training programs of McDonald’s global training center. Franchisees should recognize the importance of service within the business operation and agree to join relevant training held by the headquarter. 6. Franchisees should pay for the gas, water, electricity, expenses for public facilities, or other taxes from operation. Franchisees should be authorized by the headquarter before making any construction to building structure, fixed equipments and operation equipments. 7. Franchisees should recognize the importance of every part within the franchise system, including menu, production specifications, quality, quantity, production appearance, facilities, etc. The headquarter has the right to examine the franchise stores to ensure the operations are in agreement with the standards of McDonald’s system. 42.

(53) 8. Franchisees should consciously and fully utilize their rights written in the contract and put all their time and efforts into their operations. Franchisees should avoid any activity which might damage business operations and sales. 9. Franchisees would be regarded as violating franchise contract when some events happen, and the headquarter have the right to terminate the contract. For example, franchisees operate and manage their stores not in a clean and safe operation; franchisees sell products produced not based on McDonald’s production procedures.. Managerial Function Planning Being franchisees of such a highly developed and well-structured international company as McDonald’s, there are many things that franchisees must follow, such as making the long-term plans. Interviewee E described,. Headquarter will hold a 31Q conference every year, telling you what are the plans for the next year, and what new missions will come out afterward. Those information will be sent once per year, but the headquarter might hold provisional communications if there are something new or special. The headquarter will communicate every season, and there will be one video conference every month for headquarter to communicate again. [E-01-01]. Another interviewee, interviewee G, helped explain the 31Q conference more clearly,. …the 31Q annual conference, three-year direction, one-year aspect, and one-quarter 43.