Do franchisees engage in entrepreneurial behavior? When and with what effects?

Little is known about entrepreneurial behavior of franchisees. Since franchisees exhibit characteristics of both independent and corporate entrepreneurs, we combine various literature streams to develop and test hypotheses on the antecedents and consequences of entrepreneurial franchisee behavior. The results show that franchisees do engage in entrepreneurial behavior, operationalized as introducing new products/services, new methods of operation, new sources of supply, and targeting new markets. Entrepreneurial franchisee behavior is mainly related to franchisees’ intrinsic motivations, relational satisfaction and local competition. Entrepreneurial franchisee behavior has a slight positive impact on unit performance, but it also leads to variation in unit performance.