Franchise Relationship: Free-Riding Emergence of Local Indonesian Franchised F&B Brands
American Journal of Management Science and Engineering
Volume 2, Issue 6, November 2017, Pages: 183-191
Received: Sep. 25, 2017; Accepted: Nov. 10, 2017; Published: Dec. 18, 2017
Views 448      Downloads 21
Ebenezer Nickson Neequaye, Department of Industrial Economics, Hohai Business School, Hohai University, Nanjing, China
Huang Dechun, Department of Industrial Economics, Hohai Business School, Hohai University, Nanjing, China
Rosemary Boateng Coffie, Department of Human Resource and Organizational Development, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana
Puput Ichwatus Sholihah, Department of Engineering and Project Management, Public Administration School, Hohai University, Nanjing, China
Nelson Amowine, Department of Industrial Economics, Hohai Business School, Hohai University, Nanjing, China
Stella Fynn, Department of Industrial Economics, Hohai Business School, Hohai University, Nanjing, China
Rita Karley Richardson, Department of Industrial Economics, Hohai Business School, Hohai University, Nanjing, China
Article Tools
Follow on us
This study aims to analyze the relationship in the franchise business local Indonesian F&B brands. Samples are taken of 500 respondents; in 5 major cities of the local F&B brands franchise business in Indonesia. This study is using convenience sampling. SEM (Structural Equations Model) analysis technique in this research was used by making use of existing software AMOS (Analysis of Moment structure) version 18.00. The findings suggest that centralization has no significant effect on free riding behavior. The study states that the behavior of free riding can not be discounted by formalization, however, the result also demonstrate interaction may prevent free riding behavior. The result indicates that competition (external competition) can also reduce the possibility of free riding behavior in local Indonesia F&B Franchise.
Franchise, Free Riding, F&B Franchise, Indonesia
To cite this article
Ebenezer Nickson Neequaye, Huang Dechun, Rosemary Boateng Coffie, Puput Ichwatus Sholihah, Nelson Amowine, Stella Fynn, Rita Karley Richardson, Franchise Relationship: Free-Riding Emergence of Local Indonesian Franchised F&B Brands, American Journal of Management Science and Engineering. Vol. 2, No. 6, 2017, pp. 183-191. doi: 10.11648/j.ajmse.20170206.14
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
C. Helmers and M. Rogers, “Innovation and the survival of new firms in the UK,” Rev. Ind. Organ., vol. 36, no. 3, pp. 227–248, 2010.
M. Mendelsohn, The Guide to Franchising, 6th ed. Pennsylvania: Cassell, 1999.
Minesota Department of Employment and Economic Development, An Introduction to Franchising, no. April. 2008.
Lukman Hakim, Info Lengkap Waralaba. Yogyakarta: MedPress, 2008.
A. Karamoy, Sukses Usaha Lewat Waralaba, Jurnalindo. Jakarta, 2009.
S. Muharram, Referensi Teknis Waralaba-Panduan Bagi Usahawan Untuk Merintis Jaringan Waralaba. Jakarta: Pradnya Paramita, 2003.
M. Carney and E. Gedajlovic, “Vertical integration in Franchise systems: Agency theory and resource explanations,” Strateg. Manag. J., vol. 12, no. 8, pp. 607–629, 1991.
F. Lafontaine and K. L. Shaw, “Targeting Managerial Control: Evidence From Franchising,” Rand J. Econ., vol. 36, no. 1, pp. 131–150, 2005.
R. E. Kidwell, A. Nygaard, and R. Silkoset, “Antecedents and effects of free riding in the franchisor-franchisee relationship,” J. Bus. Ventur., vol. 22, no. 4, pp. 522–544, 2007.
J. L. Bradach, “Using the Plural Form in the Management of Restaurant Chains,” Adm. Sci. Q., vol. 42, no. 2, pp. 276–303, 1997.
A. I. Rokkan and A. Buvik, “Inter-firm Cooperation and the Problem of Free Riding Behavior: an Empirical Study of Voluntary Retail Chains,” J. Purch. Supply Manag., vol. 9, no. 5, pp. 247–256, 2003.
S. C. Michael, “The effect of organizational form on quality: the case of franchising,” J. Econ. Behav. Organ., vol. 43, no. 3, pp. 295–318, 2000.
J. Ibrahim and L. Sewu, Hukum Bisnis Dalam Persepsi Manusia Modern. Bandung: Refika Aditama, 2007.
A. Sutedi, Hukum Waralaba, First Edit. Bogor: Ghalia Indonesia, 2008.
W. Gillis and G. J. Castrogiovanni, “The franchising business model: An entrepreneurial growth alternative,” Int. Entrep. Manag. J., vol. 8, no. 1, pp. 75–98, 2012.
O. Ferrell and S. Skinner, “Ethical Behavior and Bureaucratic Structure in Marketing Research Organizations.,” J. Mark. Res., vol. 25, no. 1, pp. 103–109, 1988.
C. J. Chen and J. W. Huang, “How organizational climate and structure affect knowledge management-The social interaction perspective,” Int. J. Inf. Manage., vol. 27, no. 2, pp. 104–118, 2007.
C. Liao, S. H. Chuang, and P. L. To, “How knowledge management mediates the relationship between environment and organizational structure,” J. Bus. Res., vol. 64, no. 7, pp. 728–736, 2011.
M. Schminke, M. L. Ambrose, and R. S. Cropanzano, “The effect of organizational structure on perceptions of procedural fairness.,” J. Appl. Psychol., vol. 85, no. 2, pp. 294–304, 2000.
A. Nahm, “The impact of organizational structure on time-based manufacturing and plant performance,” J. Oper. Manag., vol. 21, no. 3, pp. 281–306, 2003.
A. H. V. De, “On the Nature, Formation, and Maintenance of Relations Among Organizations.,” Acad. Manag. Rev., vol. 1, no. 4, pp. 24–36, 1976.
V. Hayek, Collecticist Economic Planning: Critical Studies on the Possibility of Socialism. London: George Routledge & Sons Ltd, 1935.
V. Hayek, “Socialist Calculation III: The Competitive Solution. Economica VII (26),” Repr. Hayek, pp. 77–91, 1940.
H. L. Tosi, “James March and Herbert Simon, Organizations,” in Theories of Organization, 2008, pp. 93–102.
P. Doyle, “Building successful brands: The strategic options,” J. Mark. Manag., vol. 5, no. 1, pp. 77–95, 1989.
D. M. Gonzales and B. Lopez, “Market Saturation, Intangible Assets and Monitoring Cost: The Internationalization of Spanish Franchising,” 2003.
W. J., “The dual network structure of franchising firms: property rights, resource scarcity and transaction cost explanations,” Wind. J, Cliquet G, Hendrikse G, Tuunanen M Econ. Manag. Franch. networks, no. Physica-verlag Heidelberg, pp. 69–88, 2004.
B. Paramita, Masalah Keserasian Budaya dan Manajemen di Indonesia. Jakarta: Lembaga Penerbit Fakultas Ekonomu Universitas Indonesia (LPFEUI), 1992.
D. S. Pugh, D. J. Hickson, C. R. Hinings, and C. Turner, “Dimensions of Organization Structure,” Adm. Sci. Q., vol. 13, no. 1, pp. 65–105, 1968.
J. Arches, “Social structure, burnout, and job satisfaction,” Soc. Work, vol. 36, no. 3, pp. 202–206, 1991.
C. Ekelund, “Franchisor-Franchisee Relationships: An Interaction Approach,” World J. Manag., vol. Vol. 5, no. No. 1, March 2014, pp. 103–109, 2014.
J. Baggs and J.-E. De Bettignies, “Product Market Competition and Agency Cost,” J. Ind. Econ., vol. Vol. LV, no. No. 2, June 2007, pp. 0022–1821, 2007.
Science Publishing Group
NEW YORK, NY 10018
Tel: (001)347-688-8931