Subjective Knowledge, Perceived Risk, and Information Search when Purchasing a Franchise: A Comparative Exploration from Australia

Franchising has long been a method by which organizations seek to expand and facilitate local market development. However, franchising as growth strategy can often be hampered lack of suitable franchisees. To mitigate this shortage, some franchisors have engaged in recruiting franchisees internally from the ranks their employees addition traditional approach externally. Predominantly are individuals rather than corporations thus purchasing franchise should most commonly characterized consumer acquisition. explore relationship between subjective knowledge, perceived risk, information search behaviors when qualitative interviews were conducted with restaurant industry. Half these respondents externally recruited having never worked for franchisor half previously franchisor. The external recruits expressed strong desire own business extensive decision-making processes significant franchises. Contrastingly, internal boss limited, bordering on habitual negligible acquiring results reveal that differences knowledge risk appear significantly impact extent two groups. A model is developed reconciles findings. findings also practical implications franchisors’ franchisee efforts integral capacity develop markets.