Search Online – Purchase Online in Franchising: An Empirical Analysis of Franchisor Website Functionality

Thierry Pénard and Rozenn Perrigot
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Rozenn Perrigot: CREM, UMR CNRS 6211, Graduate School of Management (IGR-IAE Rennes), University of Rennes 1, France

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: Many retailers use the Internet not only to provide final customers with information about their products/services, but also to allow these final customers to buy their products/services online. In the particular case of franchising, franchisors and franchisees can create their own websites, which may raise some issues, mostly in terms of uniformity and encroachment. The aim of this paper is to characterize franchisors’ e-commerce strategies by studying their website functionality. Franchisors can use their website to facilitate consumer search. They can also provide content and tools to promote online purchasing (e.g., promotion codes, online payment, delivery options). Why are some franchisor websites more “search oriented”? What are the factors that influence the provision of informational tools and/or transactional tools? This empirical study is based on a detailed observation of 130 e-commerce websites of franchisors operating their chains in the French market. Results of the three-stage least square regression models (3SLS) show that the percentage of company-owned stores within a chain has a significant and positive impact on the range of “purchase online” functionality and a neutral effect on the range of “search online” functionality. Moreover, the two types of functionality appear to be complementary on franchisor websites. Finally, in more mature franchise chains, franchisors who own a large proportion of stores are less able to exert their decision power and expand the range of online purchase functionality.

Keywords: Franchising; e-commerce; encroachment; synergies; search online; purchase online (search for similar items in EconPapers)
Date: 2015-11
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