Franchise, innovation and entrepreneurship

The Service Industries Journal, 2014 Vol. 34, Nos. 9–10, 843 –855, http://dx.doi.org/10.1080/02642069.2014.905926

Franchise, innovation and entrepreneurship ∗ Marıá Teresa Meńdeza, Miguel-Angel Galindob and Miguel-Angel Sastrec,d a

Faculty of Economics and Business, Complutense University of Madrid, Madrid, Spain; bFaculty of Law and Social Sciences, University of Castilla La Mancha, Ciudad Real, Spain; cFaculty of Commerce and Tourism, Complutense University of Madrid, Madrid, Spain; dITAM, Mexico City, Me´xico (Received 11 August 2013; accepted 14 March 2014) Since franchise business can be an alternative to independent business, it seems interesting to look at those factors that encourage individuals to choose franchise rather than independent business. It is also relevant to consider the role of innovation because it is generally accepted that independent business facilitates innovations to a greater degree than does franchise. The main goal of this paper is to determine the factors that encourage individuals to choose franchise activity and what role plays innovation in their decision. Keywords: franchising; innovation; entrepreneurship

Introduction Franchise activity plays a relevant role in modern economies. Some entrepreneurs prefer to develop a franchise activity rather than create a new one. Franchising occurs when one firm, the franchisor, sells to another, the franchisee, the right to distribute its branded goods or services for a specified period of time in a specific location. Franchisors usually provide a range of services such as training, site selection, marketing support, quality programs and vendor certification. In return, franchisees pay an up-front fee and a continuing sales royalty, and agree to follow the franchisor’s standard operating routines as specified in the written contract and operations manual (Gillis & Combs, 2009). A vast literature has been developed to determine the decisions of the franchisor. In this vein, several options have been analyzed: particularly, lack of resources (Dant, 1995; Gillis & Castrogiovanni, 2012; Oxenfeldt & Kelly, 1968) and agency theory (Gonza´lez-Dıáz & Solı´s-Rodrı´guez, 2012; Pruett & Winter, 2011; Rubin, 1978). However, there is no theory to explain the decision of the franchisee. Innovation is important in this process. Economic growth literature traditionally considers innovation as a key factor encouraging economic growth. Several patterns of behavior support this statement. Due to innovation, products are more competitive and firms can place them in more markets. Along these lines, Smith (1776/1976) stated that the division of labor is an essential element of the wealth of nations which depends on the extension of the markets. And, as just stated, the latter depends mainly on innovation process. Modern theoretical approaches have also stressed the relevance of the innovation process, considering primarily those factors that encourage the introduction of innovation ∗

Corresponding author. Email: [email protected]

# 2014 Taylor & Francis

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in firms. This analysis indicates that not only quantitative variables must be considered, but also qualitative ones, because social behavior could facilitate or discourage the innovation process. If economic agents do not accept or are not able to use the innovations, the process would stop. As Schumpeter stated, it is necessary to create a social climate that favors this process. The goal of this paper is to determine those factors that have a relevant effect on franchise activity, trying to determine the elements favored by entrepreneurs to choose between creating a new independent business activity and following an existing franchise model, taking into account the personal characteristics of entrepreneurs, as well as innovation activity. Several characteristics are considered in the study: family, work, personal characteristics and, especially, the innovation attitude of the entrepreneur. The latter characteristic is especially interesting because it could be one of the most important criteria when the choice between an independent business and a franchise is being considered. Similarly, taking into account, these personal characteristics are expected to shed light on why an entrepreneur gives a higher or lower value to each of the possible perceptions of the advantages of a franchise. Equally, it should help to determine which of these advantages are more relevant in the entrepreneurs’ decision to choose the franchise rather than an independent business. To carry out this analysis, the franchising decisions are developed in the second section. In the third section, the decision model is developed. In the fourth section, the research process is explored. The fifth section shows the results, and the main conclusions are discussed in the sixth section. Franchising decisions Franchising activity is an alternative for some entrepreneurs deciding to develop an activity. Hunt (1977) states that the great advantage of franchising is the opportunity to belong to a large chain while allowing the entrepreneur to be independent. There are several variables that could influence the franchising decision. First, there are intrinsic decisions. For instance, the expected economic results that could be obtained in a franchise activity would encourage the selection of this activity. Some authors (Diaz & Burnick, 1969) have stressed that the choice of the franchise depends on the perception of obtaining greater advantages than those provided by the independent business option. Diaz and Burnick (1969) showed that similar benefits are obtained in both options; however, franchisees are attracted to the ‘package’ of benefits offered by the franchisor because they consider that they will obtain higher benefits than by acting independently. In the franchise, there are cost advantage-driven resources in the form of process technology, system capacity and access to low-cost inputs, and differentiation advantage with its brand, product technology, marketing, distribution and service capabilities (Welsh, Davis, Desplaces, & Falbe, 2011). However, Williams (1998) states that entrepreneurs would choose the franchise activity over starting a new business if they obtain a higher utility in the first case than in the second. The differences in the expected utility depend on the differences in the expected profit in each of the alternatives, and the expected profit would depend on the entrepreneurial skills. Second, there is risk preference, another key variable to be taken into account in the decision (Knight, 1921). In general terms, franchises may pose less risk than independent

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businesses for several reasons. First, they reduce demand uncertainty. Second, historical data about the sales evolution of the product are available, and it is possible to use these data as a reliable indicator of the demand expected in areas with similar market characteristics. And finally, because franchisors can make demand projections whenever they introduce a new unit. The third variable to take into account is financial necessity. Caves and Murphy (1976) state that franchisees are a source of capital for franchisors with financial needs, and Rubin (1978) suggests that franchisors provide capital to franchisees that have financial problems. In a similar way, and following Schumpeter, we can consider several motives to carry out a business activity. In his analysis of economic development, Schumpeter stressed the relevant roles of entrepreneurship and innovation in the economic growth process. He states that an entrepreneur is a leader, and ‘leads’ the means of production into new channels (Schumpeter, 1911, p. 89). From a neo-Schumpeterian point of view, we can consider the following motives (Grebel, 2007, pp. 152 – 156):

(1) Psychology, sociology and culture. Personal characteristics and the environment in which the entrepreneur lives could encourage carrying out this activity. An adequate social climate plays an important role in the decision. (2) Social capital. Entrepreneurial action involves the interaction of the potential franchisee with members of his social network. Informal financiers, or ‘business angels’ – that is, friends and family – sometimes provide the financial resources that entrepreneurs need to develop their activity. (3) Knowledge. Together with their cognitive capabilities, entrepreneurs also need some information about the specificities of the business, management and technology. (4) Financial capital. To start a new business, entrepreneurs usually face capital constraints. From a theoretical point of view, assuming perfect capital markets, entrepreneurs could obtain the money that they need from the capital markets. However, in reality, there are some barriers that obstruct that possibility and entrepreneurs sometimes have to obtain the resources from their own savings or from family or friends. Credit availability would have a positive effect on the decision to create a new business.

The relevance of the factors that influence the choice of the business model (that is, choosing between franchise and independent business) is a controversial topic because no conclusive results have been presented in the analyses developed. Table 1 shows the different advantages offered in the main literature about this issue, ranking from greatest to least relevance. Therefore, there are a number of personal, social and economic factors influencing the decision to become a franchisee. When the franchise business is accepted, it is necessary to take into account the organizational form preferred in terms of the advantages and disadvantages offered by each. One factor that has traditionally been less considered in the literature on this subject is the preference of the franchise model, taking into account the entrepreneur’s personal assessment about the innovation possibilities shown by the franchise model. For this reason, we will focus our analysis on this topic.


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Table 1. Main reasons for franchising included in the specialized literature. Authors Advantages

Hunt (1977)

Knight (1986)

Peterson and Dant (1990)

(1) Trademark

(1) Trademark known (1) Training

(2) Assistance preand post-opening

(2) Higher independence (3) Higher job satisfaction (4) Lower risk (5) Higher profitability (6) Faster business development

(2) Independent (3) Trademark (4) Lower initial costs (5) Higher profitability (6) Lower operating costs

Withane (1991) (1) Business tested (2) Lower risk (3) Initial support (4) Ongoing support (5) Quick start (6) Get experience

Source: Guilloux, Gauzente, Kalika, and Dubost (2004).

Innovation process Innovation is not a new phenomenon; it is inherent to human development. The history of humanity has been characterized by the appearance of innovations that have changed our behavior and our labor methods. The problems that have resulted from its implementation have also been analyzed, but economists have not always paid adequate attention to this matter. On many occasions, innovation has been included in broad concepts, assuming that we were indirectly referring to it. For example, economists have historically talked about the accumulation of capital and classical economists have talked about market performance and progress instead of mechanical innovation. But this circumstance has changed, especially in recent decades, which is not to say that there have not been some contributions to the literature that emphasized the role of innovation, as in the case of Schumpeter. Fagerberg (2006, pp. 4 – 5) states that there is an important distinction between innovation and invention. ‘Invention is the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice.’ As Fagerberg shows, sometimes they are closely linked, making it very difficult to distinguish one from the other. But in many cases, there is a considerable lag between the two. However, and this is very important from our perspective, a main difference between invention and innovation is that the former may be carried out anywhere, while innovation occurs mainly in firms, where they may need to combine several different kinds of capabilities, knowledge, resources and skills (Fagerberg, 2006, p. 5). In this sense, it is necessary for a person, an innovator and/or an entrepreneur in Schumpeterian terms to carry out all these tasks. Several incentives for individuals to innovate can be considered. These incentives can be classified in three groups (Cohen & Sauermann, 2007, pp. 77– 80). The first is extrinsic motives or rewards that can be obtained by the innovator. This is the motive economists mainly consider in their analysis, and the reward can be pecuniary or promotion. A second category of incentive is intrinsic, including the motivation to carry out an activity because it is interesting, exciting or satisfying. And finally, social incentives to innovate include intangible rewards from society, such as social approval. Sometimes, social motives operate when there are not pecuniary rewards.


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Therefore, for the case of franchise, the innovation process is also encouraged for social and economic motives that must be considered in the analysis.

Model and formulation of hypotheses Taking into account the specialized literature, the model is developed to identify the personal attributes that motivate the entrepreneur’s decision to choose franchise over independent business. Using this model, it is also possible to analyze the entrepreneurs’ valuation of the franchise model as well as the main advantages considered to determine which of these perceptions about the attractiveness of the franchise activity are more important. The specialized literature has shown that attitude characteristics dominant in entrepreneurs, such as the desire for independence and their willingness to take risks, are more necessary when the business is independent than when it is a franchise. Since this statement has not been tested from an empirical point of view, we introduce the following proposition that there is a relationship between entrepreneurship attitude and independent business preference over the franchise option. P1: Individuals with lower entrepreneurial attitude will prefer franchise model.

Taking into account the personal characteristics of entrepreneurs, some studies ´ lvarez & Busewitz, 2001; Baron, Markman, & Hirsa, 2001; Espı´ritu-Olmos & (A Sastre-Castillo, 2012; Fagenson & Marcus, 1991; Kephart & Schumacher, 2005; Lerner & Pines, 2010; Mitchelmore & Rowley, 2013; Sastre-Castillo, Peris-Ortiz, & Danvila del Valle, in press) conclude that men show a higher entrepreneurship attitude than women. But, to date, no gender-based franchisee motivational analysis has been conducted, leading researchers to suggest that the reasons why female entrepreneurs join franchise or independent systems have not been explored (Dant, Brush, & Inesta, 1996; Stanworth & Curran, 1999; Weaven, Isaac, & Herington, 2007). Therefore, gender has only been taken as a control variable in the study. As stated in the role theory, family influence is one of the most relevant determinants in the decision to become an entrepreneur, so those people whose parents have been entrepreneurs will be more likely to be entrepreneurs (Espı´ritu-Olmos & Sastre-Castillo, 2007). However, there are no studies about the preferred type of business depending on the parents, whether they are or not employers. Hence, the socio-demographic variable, family influence, is collected as a control variable. Several studies have been developed on the premise that entrepreneurs show different characteristics relative to the general population. However, as Weaven, Grace, and Manning (2009) stated, we have little knowledge about the franchisee personality. These authors make an exploratory study using the Big-Five personality factors, but we chose to use the factors of the Espı´ritu-Olmos and Sastre-Castillo (2007) paper, where it is stressed that personality characteristics are of special relevance in entrepreneurship attitude. Therefore, we believe that those characteristics that exert more influence would also shift the preference toward independent business. Although there is little empirical evidence to support it, some authors have analyzed the relationship between entrepreneurial attitude and a positive and kind attitude toward people (Lounsbury, Gibson, Sundstrom, Wilburn, & Loveland, 2004; Singh & DeNoble, 2003; Zhao & Seibert, 2006). Therefore, our Hypothesis 1:

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H1: Individuals who exhibit greater kindness are more likely to choose an independent business over a franchise opportunity.

Hornaday and Aboud (1971) stressed the need for entrepreneurs to have a high need for achievement because their persistence in their objective to achieve professional success would give them the necessary confidence to carry out independent business without the help available to the franchisee (Lee & Tsang, 2001). Therefore, our Hypothesis 2: H2: Individuals who exhibit greater need for achievement are more likely to choose an independent business over a franchise opportunity.

For several decades, authors such as Shaver and Scott (1991) have analyzed the relationship between inner control and the capability to develop businesses, because those entrepreneurs that are able to control their life in an independent way try to carry out their businesses without franchise activity. Therefore, our Hypothesis 3: H3: Individuals who exhibit greater inner control are more likely to choose an independent business over a franchise opportunity.

Tendency toward risk is one of the clearest entrepreneurial characteristics (Bhasin, 2007; Korunka, Frank, Lueger, & Mugler, 2003). An entrepreneur with a strong willingness, even preference, to undertake risk does not feel the need to depend on the franchisor network for help to develop a business activity. So, our Hypothesis 4: H4: Individuals who exhibit greater tendency towards risk are more likely to choose an independent business over a franchise opportunity.

Ambiguity created by an uncertain situation is typical in business creation and management (Begley & Boyd, 1987). This ambiguity is more important in independent business where there is no previous experience and information transmission from the franchisor. Thus, Hypothesis 5: H5: Individuals who exhibit greater tolerance for ambiguity are more likely to choose an independent business over a franchise opportunity.

Several authors have shown that optimistic and self-confident people have higher entrepreneurial and initiative aptitudes (Casson, 2005). So, it is possible to think that this type of person would prefer independent business over franchise. Therefore, our Hypothesis 6: H6: Individuals who exhibit greater tendency towards extroversion are more likely to choose an independent business over a franchise opportunity.

As noted in the previous theoretical review, the attitude toward innovation can be a determining characteristic that steers one to avoid restrictions imposed by the franchise model. This relation has not been tested from an empirical point of view. We think it is necessary to explore further the underlying constructs within the innovative behavior in order to establish a clear causal relationship of this factor to the preference for a certain type of business (independent or franchise). So, we introduce the next proposition: P2: The most innovative individuals will prefer independent business.

Finally, to determine the perceptions of the franchise advantages (lower starting costs, mark, lower operating costs, less involvement in the business, greater independence, better performance, training or opportunities to innovate) that are more relevant in the selection


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of this business model, rather than the independent business model, an exploratory study has been carried out that allows us to rank the advantages.

Research analysis Information source The data used in the study are obtained from a questionnaire that includes 63 items related to personal characteristics (demographic, familiar, occupational, behavioral characteristics and attitude to innovation), attitudes toward entrepreneurship, and the preference between the franchise model and independent business. The study also included those characteristics of the franchise model that are more attractive. The questionnaire was given to a sample of 108 university students in March and April 2011. The main objective of the article is to analyze the individual characteristics that may explain the choice probability in choosing between a franchise and an independent business in the case of creating one’s own business. This kind of analysis can be developed in two different ways: considering individuals who have already gone through this decision process or taking into account individuals who have not yet done so, analyzing the intentions or preferences they manifest. In the latter, we have the case of earlier models of intention. As is shown in the classical models of entrepreneurship literature (i.e. Shapiro; Ajzen or Krueger and Brazeal), the study of entrepreneurial intentions is a strongly entrenched line, counting on high justification in the literature. Our paper analyses the inclination considering two options: independent and franchise. For this reason, if we have considered in our sample entrepreneur franchisees, we have introduced an important bias in the sample. Therefore, considering students (that in most cases have not yet had the opportunity of taking a decision respecting their business projects) is a good choice when our objective is the study of entrepreneurial intentions as this has been done in well-known papers.

Variables measure The demographic variables used as control variables such as age or gender were obtained using direct questions, as well as those variables corresponding to family business and work experience. The latter is measured by the number of companies in which they have worked and the number of years of work experience. To measure the entrepreneurship attitude variable, five items have been considered, including the different dimensions of this variable, carrying out a factor analysis. These dimensions have been taken from Espı´ritu-Olmos and Sastre-Castillo (2007). In the case of the variable of preference in choosing franchise or independent business, a semantic differential scale was used, where 1 means total preference for independent business and 10 means total preference for franchise. For the variables ‘perceived advantages of the franchise’, 10-point scales were used, with 10 being the maximum value of such advantage. Finally, personal characteristics and attitudes toward innovation were measured through 42 items in a 10-point scale, where 1 means strongly disagree and 10 is strongly agree.


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Taking into account the scores obtained in the test, a factor analysis was carried out to summarize the information according to the characteristics previously considered. Analysis Factor analysis was previously carried out to obtain the entrepreneurial attitude, personal characteristics and innovative attitude variables. Later, a correlation and regression analysis and regression (stepwise) was developed. For the statistical treatment of data, the SPSS 12.0 program was used. Results With regard to entrepreneurial attitude, the data show that there is no correlation between this attitude and the preference for the type of business chosen (Table 2). Nor is there any correlation between preference for business and the gender of the subject. Considering the factor of whether there was a family history of entrepreneurial behavior, the results of the estimation (analysis of variance) show that this trait does not influence the preference for the model franchise or independent business. When the behavioral characteristics of the individual are considered, the preference for the independent business model shows a positive correlation and significant with higher propensity to risk, with tolerance for ambiguity and with extroversion (Table 3).

Table 2. Correlations between entrepreneurship and preference for franchise. Entrepreneurship Entrepreneurship Pearson correlation Sig. (bilateral) Franchise Pearson correlation Sig. (bilateral)

Franchise 20.099 0.380

1 20.099 0.380

1

Table 3. Correlations between personal characteristics. Tolerance Need for Risk for Inner Kindness achievement tolerance Extroversion ambiguity control Neuroticism Innovation 0.103 act. (r) Significance 0.294 Entrepren. 20.105 (r) Significance 0.359 Franchise 20.052 (r) Significance 0.593 ∗

0.107 0.272 0.227∗ 0.043 20.109 0.260

20.008 0.938 0.378∗∗

0.934 0.198

0.001 20.198∗

0.078 20.258∗∗

0.040

0.007

Correlation is significant at 0.05 level (bilateral). Correlation is significant at 0.01 level (bilateral).

∗∗

20.008

0.272∗∗ 0.120 0.005 0.220 0.430∗∗ 0.320∗∗ 0.000 0.004 20.273∗∗ 0.020 0.004

0.835

0.110 0.261 20.087 0.443 0.163 0.092


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Table 4. Correlations between innovation attitude and preference for franchise. Franchise Franchise Pearson correlation Sig. (bilateral) Innovation act. Pearson correlation Sig. (bilateral)

Innovation act.

1

0.042 0.668

0.042 0.668

1

There is no significant correlation between preference for franchise and innovation attitude (Table 4). Regarding the exploratory study on the perceived advantages of the franchise model, the lower operating costs, the greater independence, the higher investment performance and the continuous training seem to be good reasons for choosing franchise instead of independent business (Table 5). As socio-demographic aspects seemed to have no impact on the preference of choosing between the franchise and independent model, a stepwise regression was carried out to explain the preference of the franchise using the personality variables and the perceived advantages that can make the franchise option more attractive. The results show (Tables 6 and 7) that the best predictors of the tendency to choose the franchise option are continuous training supplied by the franchisor, a low tolerance for Table 5. Correlations between preference for franchise and perceived advantages.

Franchise Significance ∗

F_M_1

F_M_2

F_M_3

F_M_4

F_M_5

F_M_6

F_M_7

F_M_8

0.142 0.146

0.106 0.280

0.222∗ 0.022

0.004 0.966

0.264∗∗ 0.006

0.321∗∗ 0.001

0.280∗∗ 0.004

0.070 0.476

Correlation is significant at 0.05 level (bilateral). Correlation is significant at 0.01 level (bilateral).

∗∗

Table 6. Regression model summary. Change statistical 2

Model 1 2 3 4 5

R

R2

R corrected

Standard error

Change in R2

0.372∗∗ ∗ 0.452 0.523† 0.576‡ 0.610§

0.138 0.205 0.274 0.332 0.372

0.125 0.180 0.240 0.290 0.322

2.421 2.344 2.257 2.181 2.132

0.138 0.066 0.069 0.058 0.040

Change Sig. of F in F gl1 gl2 change 10.754 5.496 6.186 5.581 4.013

1 1 1 1 1

67 66 65 64 63

Note: Dependent variable: franchise. ∗ Predictor variables: (constant), F_M_7. ∗∗ Predictor variables: (constant), F_M_7, tolerance. † Predictor variables: (constant), F_M_7, tolerance, F_M_4. ‡ Predictor variables: (constant), F_M_7, tolerance, F_M_4, inner control. § Predictor variables: (constant), F_M_7, tolerance, F_M_4, inner control, F_M_1.

0.002 0.022 0.015 0.021 0.049

Durbin – Watson

2.034


852 Table 7. Regression coefficients.∗

Non-standardized coefficients Model 1 2 3

4

5

∗

(Constant) F_M_7 (Constant) F_M_7 Tolerance (Constant) F_M_7 Tolerance F_M_4 (Constant) F_M_7 Tolerance F_M_4 Inner control (Constant) F_M_7 Tolerance F_M_4 Inner control F_M_1

B

Standard error

1.901 0.404 2.177 0.385 20.786 3.251 0.459 20.849 20.293 2.855 0.532 20.812 20.299 20.673 2.057 0.437 20.454 20.384 20.705 0.270

0.781 0.123 0.765 0.119 0.335 0.853 0.119 0.324 0.118 0.842 0.119 0.313 0.114 0.285 0.914 0.126 0.354 0.119 0.279 0.135

Standardized coefficients Beta 0.372 0.355 20.258 0.423 20.279 20.273 0.490 20.266 20.278 20.250 0.403 20.149 20.357 20.262 0.274

t

Sig.

2.435 3.279 2.847 3.226 22.344 3.809 3.868 22.621 22.487 3.391 4.477 22.591 22.622 22.362 2.251 3.481 21.282 23.221 22.525 2.003

0.018 0.002 0.006 0.002 0.022 0.000 0.000 0.011 0.015 0.001 0.000 0.012 0.011 0.021 0.028 0.001 0.045 0.002 0.014 0.049

Dependent variable: franchise.

ambiguity, less involvement in the business that allows the franchisee more inner control and the lower starting costs (the model explains 37.2% of variance). Conclusions The results obtained in our analysis show that there is no relationship between entrepreneurial attitude and the business model that an individual is likely to develop, that is, franchise or independent. In this way, we observe that the franchisee entrepreneur does not choose this kind of activity as a substitute for independent business, believing that he has limited capacities to develop his own business and that he requires the support of a franchisor. The main explanatory factors of this decision are personal characteristics, as is shown in the analysis developed. These traits are important when franchise is chosen as the model to carry out, as well as in explaining the desire to carry out the entrepreneurship activity and the innovative attitude (high need for achievement, propensity to risk, tolerance for ambiguity and high inner control). In the case of the franchise choice, the most important personal characteristics are tolerance for ambiguity and inner control. Individuals with low tolerance for ambiguity have great difficulty facing unstable and unpredictable situations. Therefore, this characteristic is not typical in the case of an entrepreneur, as is demonstrated in the specialized literature (Gupta & Govindarajan, 1984; Gu¨rol & Atsan, 2006; Koh, 1996; Teoh & Foo, 1997). When an individual with this characteristic intends to create his own company, the individual will see the possibility to choose the franchise as a better option, because he can reduce the level of uncertainty.


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The second feature explaining the preference of the franchise model is inner control. Previous studies have concluded that people with higher inner control engage easily in entrepreneurial projects (Ajzen, 1987; Bagozzi, Baumgartner, & Yi, 1992; Krueger, Reily, & Carsrud, 2000; Li, 2007) and to the extent that these people are convinced that their decisions can moderate external influences, they do not need external supports, as those that the franchisor could supply, to try to reduce the failure probability due to external causes. The personal characteristics, extroversion or kindness, are not significant in the empirical analysis; in fact, previous research has presented contradictions regarding this topic. Along with the studies mentioned that defended the positive influence of the characteristic, others such as Brice (2002) found a negative relationship with general entrepreneurial attitude. Additionally, the personal attitude toward innovation does not explain, contrary to what might be thought, the preference for the independent business model compared to the franchise. In fact, if the results are considered, the item assessment ‘Opportunities for innovation in my business’ is not considered as an advantage or a disadvantage when the franchise model is chosen. It could be considered that entrepreneurs believe that they can innovate in the management of their business when they develop a franchised business, or they may consider that the complete freedom to decide in an independent business does not exceed the advantage of working in a tested business model, as in a franchise. Nor are other possible advantages, such as having a name that is well known in the market or the lower operating costs, valued in a clear way. Perhaps individuals perceive that the savings in the costs generated by economies of scale or the learning effect of the franchisor are offset by higher cost of royalties. This reasoning could also explain why they do not perceive a greater chance of profitability in the franchise. On the contrary, among the most valued aspects that may lead to the choice of the franchise rather than independent business are the lower entry costs and the fact that this model is easier to manage. The supports supplied by the franchisor, such as continuous training, make this a business model that allows minor involvement. Taking into account these facts, this study indicates that entrepreneurs positively evaluate autonomy in the development of their activity. But compared to the total independence supplied by the independent business, the franchise model seems to provide security for potential employers (a factor especially appreciated by those individuals who show lower tolerance for ambiguity). As possible future research, it would be interesting not only to consider potential employers, but also to analyze profiles of actual entrepreneurs, independent entrepreneurs and franchisees, to validate the results obtained in this paper. Also as future research suggested in this paper, we propose further study of the underlying constructs in entrepreneurial behavior and innovative thinking in order to arrive at hypotheses that could be contrasted and allow a better understanding of their relationship with preference toward the entrepreneurial model franchise. References Ajzen, I. (1987). Attitudes, traits, and actions: Dispositional prediction of behavior in social psychology. Advances in Experimental Social Psychology, 20, 1–63. ´ lvarez, S., & Busewitz, L. (2001). The entrepreneurship of resource-based theory. Journal of A Management, 27(6), 755 –775. Bagozzi, R., Baumgartner, H., & Yi, Y. (1992). State vs. action orientation and the theory of reasoned action. Journal of Consumer Research, 18, 505–519.

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