Description
Innovation is an important aspect of business today. It is important for companies to be innovative in order to stay competitive with their competitors. During the last couple of decades, technology has become more and more common both in our daily life, as well as in businesses.
Innovation within Fast Food
Restaurants
-The role of the local restaurant management
Bachelor’s Thesis within Business Administration
Authors: Henrik Antonsson
Lukas Engström
Vytautas Verbus
Tutor: Olga Sasinovskaya
Jonkoping [May 2011]
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Authors’ Acknowledgements
The authors would like to thank their tutor Olga Sasinovskaya for valuable support
and feedback.
Also, the authors would like to thank all participants in this thesis for their coopera-
tion.
Finally, the authors would like to thank everyone who has been a part of this thesis,
who provided the authors with support, feedback and encouragement.
ii
Bachelor’s Thesis in Business Administration
Title: [Innovation in Fast Food Restaurants – The role of the local restau-
rant management]
Authors: Henrik Antonsson
Lukas Engström
Vytautas Verbus
Tutor: Olga Sasinovskaya
Date: [2011-05-23]
Subject terms: Innovation, power, communication, franchise, company-owned, fast food
restaurant
Abstract
Background: Innovation is an important aspect of business today. It is important for
companies to be innovative in order to stay competitive with their competitors. Dur-
ing the last couple of decades, technology has become more and more common both
in our daily life, as well as in businesses. This has lead to an increase in technology
implementation, especially within the service industry, where customers now can use
self-service technologies in order to receive the service on their own. However, a
lack of self-service technologies was discovered within the fast food industry. Since
these types of innovations increased the service efficiency and decreased the waiting-
time for customers, the authors believed that this would be very interesting for local
managers within the fast food industry. Therefore, the authors began to investigate
how much power local management has over these types of new innovations.
Purpose: The purpose of this thesis is to explore how local management affects the
innovation process, within fast food restaurant chains.
Method: By conducting a cross-case study with the two fast food companies Sub-
way and Max, the authors interviewed local fast food managers in order to explore
the effect local management have on the innovation process. These two cases were
selected since Subway fully consists of franchisees, while Max is almost completely
company owned. Therefore, the two most common organizational structures within
the fast food industry are included which will provide a more fair view of the indus-
try.
iii
Conclusion: The effect of the innovation process has a positive relationship with the
amount of power distributed to the local management. However, these areas differ
depending on the organizational structure, with franchisees achieving their highest
amount of power within medium-sized innovations and managers in company-owned
outlets maintain their highest amount of power within minor innovations. Even
though the overall communication was perceived as satisfying and efficient, large
opportunities for improvements occur. By implementing more horizontal communi-
cation within the local management, it is in the belief of the authors that the entire in-
ternal communication will benefit. Especially this would benefit the franchise system
where an increased local communication and collaboration would lead to more effi-
cient communication throughout the entire organization.
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Definitions
SST: Self-Service Technology. Technological products
that enable customers to produce their own ser-
vice (Natarajan, 2010).
Innovation: Schumpeter (1934) defined innovation as the act of in-
fusing a new component or a mix of components into
production.
Fast food restaurants:The authors own definition: Restaurants that pro-
duces food fast. Customers do normally not spend
long time in the restaurant. Examples of these
places are Max, McDonalds, Burger King and
Subway.
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Table of Contents
1 Introduction/Background ........................................................ 8
1.1 Problem Statement ....................................................................... 9
1.1.1 Franchisees ........................................................................ 9
1.1.2 Company owned outlets ..................................................... 9
1.2 Purpose ....................................................................................... 10
1.3 Research questions..................................................................... 10
1.4 Delimitations................................................................................ 10
2 Theoretical Framework ......................................................... 11
2.1 Self-Service Technologies ........................................................... 11
2.1.1 Franchising ....................................................................... 12
2.1.2 Innovation ......................................................................... 12
2.1.3 Innovation in a franchise setting ........................................ 13
2.1.4 Franchisee vs. Company-owned outlets ........................... 14
2.1.5 Communication ................................................................. 16
2.1.6 Experience of a franchisee ............................................... 16
2.2 Summary of the findings .............................................................. 17
2.3 Concept Development ................................................................. 17
2.3.1 Roger’s diffusion of innovation .......................................... 17
3 Method ..................................................................................... 20
3.1 Arguments for selecting a case study approach .......................... 20
3.2 Pilot study ................................................................................... 20
3.3 Case selection............................................................................. 21
3.3.1 Location of Research ........................................................ 21
3.3.1.1 Subway ......................................................................................................... 21
3.3.1.2 Max ............................................................................................................... 23
3.3.2 Selection of study units ..................................................... 23
3.4 Data Collection ............................................................................ 24
3.4.1 Language of the interview ................................................. 26
3.4.2 Interview Techniques ........................................................ 27
3.4.3 Interview guide.................................................................. 29
3.5 Data analysis............................................................................... 30
3.5.1 Inductive vs. Deductive approach ..................................... 30
3.5.2 Cross case analysis .......................................................... 31
3.6 Trustworthiness ........................................................................... 31
3.6.1 Credibility .......................................................................... 31
3.6.2 Transferability ................................................................... 33
3.6.3 Dependability .................................................................... 33
3.6.4 Confirmability .................................................................... 34
3.7 Interpretation of the data ............................................................. 34
4 Results .................................................................................... 36
4.1 Current relationship with SST’s ................................................... 36
4.1.1 Max ................................................................................... 36
4.1.2 Subway ............................................................................. 37
4.2 Comparison with competitors ...................................................... 37
4.2.1 Max ................................................................................... 37
4.2.2 Subway ............................................................................. 38
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4.3 Communication ........................................................................... 38
4.3.1 Max ................................................................................... 38
4.3.2 Subway ............................................................................. 40
4.4 Innovation, changes and power distribution ................................. 42
4.4.1 Max ................................................................................... 42
4.4.2 Subway ............................................................................. 44
5 Analysis ................................................................................... 48
5.1 Max ............................................................................................. 48
5.1.1 Communication ................................................................. 48
5.1.2 Power ............................................................................... 50
5.1.3 Roger´s diffusion of Innovation, at Max ............................. 51
5.1.4 Examination of previous research ..................................... 53
5.2 Subway ....................................................................................... 54
5.2.1 Communication ................................................................. 54
5.2.2 Rogers Diffusion of Innovation applied on Subway ........... 57
5.2.3 Examination of previous research ..................................... 59
5.2.4 The three Processes of Innovation within Subway ............ 59
5.2.5 Individual Entrepreneurship .............................................. 61
5.2.6 Control over franchisees ................................................... 62
6 Conclusion .............................................................................. 63
7 Discussion .............................................................................. 65
7.1 Suggestions for further research ................................................. 65
References .................................................................................... 67
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Figures
Figure 1 Five stages in the Decision Innovation Process…………………………...18
Figure 2 ……………………………………………………………………………..49
Figure 3 ……………………………………………………………………………..52
Figure 4 ……………………………………………………………………………..57
Figure 5 ……………………………………………………………………………..58
Figure 6 ……………………………………………………………………………..61
Tables
Table 1. Factors influencing innovation in fast food franchises ……………………17
Table 2. Overview over the restaurants, interviewees, place, time, length and lan-
guage of interview ………………………………………………………………25-26
Appendicies
Appendix 1 Questions for Max
Appendix 2 Frågor till Max
Appendix 3 Questions for Subway
Appendix 4 Subway ordering
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1 Introduction/Background
Here the authors will introduce the reader to the topic and discuss the background and
problem statement. Further, the purpose and research questions will be presented.
In the past few decades, companies in the service industry have changed the way they
provide service to their customers. Before service was understood as customer’s person-
al and close interaction with an employee. Today, technology is changing the way how
services are developed and delivered. Some industries make use of different types of in-
novation that is lacking in other industries, like self-service technologies (SST’s). SST’s
were found to be common in the banking-, traveling- and retailing industry. However,
the authors found that in the fast food industry there was a lack of these technologies.
Judging by examples from other companies, which had implemented this technology,
there existed a huge opportunity for these technologies to be implemented with great
benefit for both companies and customers.
From the literature review it was realized that there existed a scarcity of research about
the role of local management in the innovation process within fast food restaurant
chains. After some research of relevant literature and a pilot study with several local
restaurants and cafés, the focus shifted from exploring possibilities of SST in the service
industry to the innovation process itself. Even though the focus shifted from SST-
possibilities to the innovation process, SST´s will still have an important role in this the-
sis. SST´s will work as an example of a major innovation in order to make it easier for
the interviewees to imagine the process that will take place. Additionally, a company
that already has implemented these types of technologies reports significant increase in
profit. Therefore, by using SST as an example of a major innovation the authors believe
that maximum interest from the participants will be obtained.
The pilot study also showed that a SST implementation would be treated in a similar
manner as other radical innovations requiring considerable amount of capital expendi-
ture. Therefore, the authors believed that SST served as a good example of a major in-
novation. The focus was then narrowed down to only cover fast food chains, since it be-
came relatively clear during the pilot study that this was the branch within the food ser-
vice industry which had the largest interest in implementing new technologies and
SST´s. Thus, the aim is to investigate the role of local management in the innovation
process within fast food restaurant chains.
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1.1 Problem Statement
1.1.1 Franchisees
A majority of fast food chains uses two types of establishments: franchisees and com-
pany owned outlets (Bradach, 1997). The proportion of these two establishments in a
fast food chain will have an impact on allocation of authority, power (Furquim De Aze-
vedo, 2010), innovation process (Lewin-Solomons, 1999) and communication. Dane
(1992), Dandridge and Falbe (1994) and Lewin-Solomons (1999) emphasize the impor-
tance of advisory councils as tools to communicate between franchisees and the franchi-
sor. This benefits both sides, since franchisors largely depend on franchisees feedback
and creativity as well as franchisees easily can share their thoughts and opinions. After
a thorough research of the relevant literature, the authors learned that a number of re-
searchers identified the scarcity of research about the role of the franchisee in the inno-
vation process (Dandridge, 1998; Sundbo, 2010). Dandridge (1998) looked at how or-
ganizational variables in franchising such as size, age and growth affected the support of
franchisor for franchisee innovation. Another study, conducted by Lewin-Solomons
(1999), explored how much formal and informal power each player in a fast food fran-
chise system has.
Existing research on innovation and entrepreneurship in franchising has concentrated on
franchisees, mostly due to the fact that franchisees are perceived as entrepreneurs (Dan-
dridge, 1998), even though entrepreneurship by franchisees is constrained by standards
and policies imposed by a franchisor (Bradach, 1997).
These findings set the base for one of the objectives of this thesis, which was to explore
the effect franchisees have in the innovation process within a fast food restaurant chain.
This is obtained by looking at franchisee power and effectiveness of communication be-
tween franchisee and franchisor.
1.1.2 Company owned outlets
Research identified that managers in company-owned stores are less independent than
franchisee managers and less concerned with sales or profit outcomes (Boyle, 1994;
Lewin-Solomons, 1999). This is due to the fact that company managers are more con-
cerned about stable job and promotions. Thus it would be expected from the mangers to
10
obey the authority rather than being independent and creative (Lewin-Solomons, 1999).
In addition Williams (1985) argues that managers in company-owned stores tend to
shirk and deliver worse results than franchisees because a part of their salary is fixed
and independent of the unit performance. This leads to a lack of motivation and does
not provide an incentive to increase performance. Therefore, company headquarters that
hires managers would be willing to impose more control on them than on independent
franchisees. However, in most research papers, companies being analyzed had either a
lot of franchisees and few company-owned stores, or somewhat similar proportion of
both establishments. Therefore, it would be interesting to see if the same arguments
hold in a company, where every establishment is company-owned.
Thus, the other objective of this research paper was to explore the effect local manage-
ment has in the innovation process within a fast food chain. This is obtained by looking
at power and effectiveness of communication between company-owned outlets and
headquarters.
1.2 Purpose
The purpose of this thesis is to explore how the local management affects the innovation
process, within fast food restaurant chains.
1.3 Research questions
How does power distribution affect the role of the local management in the innovation
process within fast food restaurant chains?
How effective is the internal communication within fast food restaurant chains?
1.4 Delimitations
The main focus in this thesis was to explore the effect of local management within the
innovation process. Since the innovation process is also affected by other participants,
such as headquarter and higher level managers, it was necessary to include these layers
in this study. However, it was not the intention of the authors of this thesis to investigate
these additional layers in-depth. Additionally, the intention of this thesis was not to
compare two selected cases, but rather treat them as separate study units, link them to
the theoretical constructs and see if they comply or contradict them.
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2 Theoretical Framework
Here the authors will present and discuss relevant theories that have guided the authors
throughout this research.
2.1 Self-Service Technologies
In 1978, Chase (1978) discussed that service companies should try to make their opera-
tions as efficient as possible. This can be made by shifting operations that require cus-
tomer-employee interaction to the back-office if the customer-employee interaction is
not critical to the company.
With the help of technology, customers basically replace employees and produce ser-
vices themselves (Natarajan, 2010). By using self-service delivery options, the company
which implements the technology will obtain benefits such as increased productivity
and decreased costs (Lovelock, C.H. and R.F. Young, 1979) (Sathye, 1999) (Kelley,
1994). For example, IBM saved US $2 billion when they shifted telephone call service
to online service provision (Burrows 2001).
Holman (2010) pointed out some hinders which made fast food restaurants somewhat
more reluctant to use these types of technologies. One hinder he pointed out was the
fact that most of the fast food restaurants were organized as franchisees. Additionally,
current service philosophies, comfort levels with technology and financial resources of
franchisees were not beneficial for implementation of SST´s (Holman, 2010)
However, some restaurants have already implemented some types of SST, mainly touch
screen ordering systems, and enjoyed financial benefits. For example, Subway has im-
plemented a touch-screen ordering kiosk in one of their franchisee´s drive-thru´s. This
lead to an increased profit with up to US $750 per week, including larger orders and de-
creased labor costs (Nextep systems, 2006).
So, given existing research and successful practical examples from business life, it is
quite surprising that most of the fast food service companies are hesitating to implement
SST´s
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2.1.1 Franchising
Most of the well established fast food chains are franchises with a large international
presence such as McDonald’s, Subway, KFC, Burger King, Pizza Hut and more. In a
franchise agreement, the parent company, the franchisor gives the right to the franchi-
see, an independent entrepreneur, to market and sell branded products and services of a
franchisor (Furquim De Azevedo, 2010). In return, the franchisee pays fees such as
royalties, advertising fees, franchise fee and a development fee (if a franchisee decides
to open an additional unit) (Mihoubi, 2011).
The franchisor also puts constrains on the franchisee in terms of establishment design,
location of establishment and the products offered. The franchisee normally pays a fixed
fee and a royalty depending on performance. Franchisor supports product development,
trains management, and supports national promotional efforts (Dandridge, 1994).
According to Rubin (1978), it is in the best interest of the franchisor to demand unifor-
mity within the company in order to safeguard the brand. Rubin (1978) continued by
saying that one of the main problems in a franchise system was when a franchisee de-
cided to provide lower quality on a product or service than required by the franchisor. In
other words: misuse the brand.
2.1.2 Innovation
Schumpeter (1934) defined innovation as the act of infusing a new component or a mix
of components into production.
An innovation can be either radical or incremental. According to Sundbo, (2010) in-
cremental innovation is adaptation of existing products or a new way of delivering
products. These types of innovations are the most common ones in franchisees. Since
franchisees as well as company-owned outlets have specific instructions from the head-
quarters on how they should conduct business, which constrains them to implement rad-
ical innovations on their own. Deviations from this instruction can have unpleasing con-
sequences, for example, termination of a franchisee contract.
Gallouj (1994) mentioned different types of innovations: (1) Service product: which re-
sults in innovation of new element, (2) Architectural: Same elements mixed in another
way, (3) Modification: Some elements are adjusted, (4) Ad hoc: Results in a develop-
ment of a new solution.
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In their study about Swedish and Australian frantrepreneurs (a person/franchisee who
uses the franchise concept to innovate and adapt service to foreign market) Sundbo,
Johnston and Mattsson (2010) found that frantrepreneurs were driven by a number of
factors, forcing them to change the standard offering. These were: culture, industry de-
velopment between countries and opposition from staff. However, innovation made by
franterpreneurs generally had an incremental nature rather than radical.
2.1.3 Innovation in a franchise setting
Entrepreneurship within any organization depends a lot on the firm’s ability to provide
the conditions for it, especially when it comes to creating enough slack or potential
space in the system (Kao, 1989; Nohria and Gulati 1996). These factors are relevant for
the franchise system, because the amount of entrepreneurial aspects such as pro-
activeness and pursuit of aspirations will greatly depend on the organizational context
that a franchise system provides (Hamel and Prahalad 1996).
There exist numbers of entrepreneurial strategies that a company can pursue, such as
pro-activity, propensity to take some risk and promoting innovation (Miller, 1983).
Promotion of innovation can take many forms. The most common ones, also discussed
in entrepreneurship and innovation literature, are rewards and the presence of product
champions aimed to support innovation and entrepreneurial activity (Shane 1994).
It is common to see the franchisor as an entrepreneur; however the same cannot be said
about the entrepreneurial activity of a franchisee. Franchisor is keener to select manag-
ers rather than employees for running a franchisee, in order to increase the protection
for an unauthorized change (Dandridge, 1998). Thus it is important to recognize the
possible benefits that franchisee managers can provide to the whole system if they are
being encouraged to be innovative.
Dandridge (1998) found that size and relative growth of the franchise system are posi-
tively related to franchisor support for franchisee innovation. Additionally, Dandridge
(1998) found three main ways that franchisor managers use to encourage entrepreneuri-
al activity in franchisees. These were: “the use of franchise council, the recognition of
new ideas at the annual meeting of the franchise system, and the presence at franchisor
14
headquarter of a champion for innovation at the franchisor headquarters” (Dandridge,
1998, p133).
There is a belief that franchisees can be regarded as “controlled self-employed”, where
entrepreneurship is constrained by standards and policies imposed by the franchisor
(Bradach, 1997). Kaufmann and Dant (1996) looked at franchisees as being risk averse,
lacking initiative and that they enter into franchising in order to buy a secure job. How-
ever, other research recognized that franchisees were often being encouraged to be in-
novative, especially when it came to local marketing and product development (Baucus
et al. 1996). A study of McDonald’s franchisees conducted by Weaven (2004) found
that single-unit franchisees did not see innovation as an important thing. Instead, they
stressed more financial security and control over marketing
2.1.4 Franchisee vs. Company-owned outlets
As mentioned by Lewin-Solomons (1999) both franchisees and company-owned outlets
could be present in a company simultaneously. Shelton (1967) showed that fast food
franchisees are more efficient than company-owned outlets. This is due to the fact that
franchisees were more concerned about resources, costs and conditions of the local
market. Oxenfeldt and Kelly (1968) added that franchising is a faster way to grow and
gives access to financial as well as human resources and Minkler (1990) added that
franchising also provides an understanding of local markets.
However, Oxenfeldt and Kelly (1968) said that franchise systems tend to rely more on
company-ownership instead of franchising when maturity is reached. This occurs for
three main reasons: franchisor tries to increase its profit by taking control over the most
profitable units, franchisor acquires local knowledge of site when acquiring outlets and
franchisor increases the managerial skills of the company.
In general, company ownership gives more operating credibility to the franchise organi-
zation, whereas franchisees are more a source of creativity (Dant, 1992). The study of
franchising in France by Cliquet (2011) found a tendency among companies to group
franchisees together in order to smooth the progress of innovation and new product de-
velopment. They also found that franchisees experienced demotivation and anxiety if
the number of company-owned stores were too high.
15
A study conducted by Lewin-Solomons (1999) on innovation and authority in franchise
systems investigated five major fast food chains: Burger King, Pizza Hut, Denny’s,
Subway and KFC. They found that the innovation process in a fast food chain differs
depending on the proportion of franchisees compared to company-owned stores. If the
proportion of franchisees is large, like in Burger King, the innovation and creativity
usually comes from the franchisees. In chains like Denny´s and Pizza Hut, where there
are more company-owned outlets than franchisees, the innovation usually comes from
the company headquarters and is often implemented in company-owned outlets first.
In these cases, where there exist a large number of company-owned outlets, franchisees
are generally more confident about the company´s decisions. They believe that they will
not implement something that will be unprofitable, since the losses will be significant
for the company. Company headquarters are also mostly responsible for evaluating the
idea and deciding whether to implement it or not.
An additional finding by Lewin-Solomons (1999) was that most of the product testing
takes place in franchisees, especially within Burger King and Subway where the propor-
tion of franchisees is high. The companies then also depend on the constructive feed-
back of franchisees in order to solve any problem.
Difference between “formal” and “real” power has been recognized by several re-
searchers. Aghion and Tirole (1997, p. 33) explains the difference as formal power be-
ing “the right to decide” while real power being “the effective control over decisions.”
Furquim De Azevedo (2010) argued that the formal power of the franchisor will in-
crease if the number of company-owned outlets increases. Moreover, with the increase
of company-owned outlets the real power of a franchisor also increases. Because with
the help of the information gathered from its own units, the franchisor collects valuable
knowledge about franchisees environment.
However, Furquim De Azevedo (2010) also argued that if franchisor maintains too
much authority, this would impede franchisee chances to utilize specific local know-
ledge. Findings of their study suggest that the higher the brand value the lower the allo-
cation of authority to franchisees.
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2.1.5 Communication
Bradach (1997) found that communication between the higher level and local manage-
ment in company-owned outlets was strictly formal. It was typical to use management
information systems for measuring performance of the company. Field audits were tak-
ing place on average once per month, together with frequent secret visits by company
managers in order to assess dining experience from customers point of view (Bradach,
1997).
Bradach (1997), continued to say that the most important aspects for higher level man-
agement in order to communicate with franchisee were communication-, negotiation-
and listening skills. Field audits and secret visits for evaluating performance were car-
ried out less frequently in franchisees than in company-owned outlets. This implies that
franchisees have greater amount of independence which can positively affect their posi-
tion in the innovation process.
From the franchisee perspective, one of the most important tools for communication
was the franchisee advisory councils. The advisory council served as a valuable instru-
ment for the franchisees to communicate with their superiors. Dandridge (1994) defined
the advisory council as an elected or selected small group of franchisees who meet with
company headquarters representative to give advice on matter that are important to all
franchisees. Research by Dane (1992) concluded that both autonomy and high depen-
dence on franchisor would increase franchisee success. Lewin-Solomons (1999) added
that advisory councils were very important for franchisees, because headquarters de-
pend largely on franchisee input when it came to decision-making.
2.1.6 Experience of a franchisee
Managerial expertise is an organizational specific asset that accumulates in time (Wil-
liamson, 1985). The study conducted by Dandridge (1998) found that company size had
positive impact on franchisor support on franchisee innovation. The degree of innova-
tion by franchisees was also found to be positively affected by the amount of time the
franchisee is in the system (Wilson, 2009). Study by Lewin-Solomons (1999) found that
franchisors sometimes ignore when franchisees deviate from the norms because franchi-
sors trust their experience. However all major innovations, such as, implementing a
SST, must be approved by the franchisor (Lewin-Solomons, 1999). In any case, major
ideas can be born from franchisee, the company-owned outlet or the company headquar-
17
ters. However, franchisee or a company-owned outlet would need to contact the head-
quarters of the company or meet them in order to present the idea and get the approval
for it (Wilson, 2009)
2.2 Summary of the findings
By looking at the previous research, a number of factors that affect innovation were
identified. These are presented in the table below.
Table 1. Factors influencing innovation in fast food franchises.
1 The proportion of franchisee restaurants in a
franchise system
Lewin-Solomons (1999)
2 The existence of an advisory council Dane (1992); Dandridge (1994)
3 Power Lewin-Solomons (1999); Furquim De Aze-
vedo (2010)
4
Financial resources
(Holman, 2010)
5
Current service philosophies
(Holman, 2010)
6 Presence of champion of innovation (Shane 1994); (Dandridge, 1998)
7 Recognition of new ideas in annual meetings Lewin-Solomons (1999); (Dandridge, 1998)
The authors of this thesis will focus on the first three factors.
2.3Concept Development
2.3.1Roger’s diffusion of innovation
For the purpose of this study, the authors chose Roger’s Diffusion of Innovation process
in order to explain the innovation process in fast food restaurants. According to Rogers
(1995) there exist 5 stages of Diffusion of Innovation:
18
Figure 1.
1. Knowledge
Here the individual is exposed to and aware of an innovation, but is not inspired to find
more information about that innovation.
2. Persuasion
A very large interest regarding an innovation exists and active information gathering
takes place.
3. Decision
Here, advantages and disadvantages (costs) regarding the innovation will be compared
in order to sort out if the innovation should be rejected or accepted.
4. Implementation
The implementation of the innovation. In this stage the innovation is tested, in order to
see if the innovation is useful or not.
5. Confirmation
Decision regarding further use and implementation to its fullest potential will be made
here.
19
According to Lewin-Solomons (1999) creativity usually comes from the franchisees
when it exist a relatively high proportion of franchisees in comparison to company-
owned outlets (for example, in companies such as Burger King and Subway). In these
cases, the main actors in the first two stages (Knowledge and Persuasion) should
therefore be franchisees. However, since the franchisor sets the standards on how a
franchisee should conduct its business, any change proposed by a franchisee would
require the approval by the franchisor. Therefore, stage three (Decision) will be in the
hands of the franchisor. According to Lewin-Solomons (1999), most of the product
testing within companies with high proportion of franchisees takes place in the
franchisees. Leading to franchisees being the main actor during the fourth stage
(Implementation). As mentioned, the power over the franchisees lays at the franchisor.
Therefore, the franchisor will control the final step regarding innovation process
(Confirmation).
On the other hand, Lewin-Solomons (1999) stated that when there exists more
company-owned stores than franchisees, the innovation tends to origin from the
company headquarters and were often implemented in company stores first. Therefore,
in companies with a majority of company-owned outlets, the headquarters would be the
main actor during more or less the entire implementation process, however the
implementation itself (Stage 3) would take place in the local restaurants. This gives the
local management some control over the fourth stage (Implementation) (Lewin-
Solomons 1999).
20
3 Method
Here the method for gathering the empirical data will be presented.
3.1 Arguments for selecting a case study approach
According to Yin (2003) three conditions should be taken into consideration when
choosing a research strategy: 1) the type of a research question, 2) the degree of control
the author has over the study units and 3) research focus on contemporary as opposed to
historical phenomena (Yin, 2003). The authors have chosen a case study because this
study looks more at operational links of the phenomenon rather than incidence or preva-
lence of the phenomenon. It also emphasizes on explaining how organizational structure
affects the innovation process. According to Yin (2003) “how” and “why” questions are
more exploratory and lead towards case studies, experiments and histories.
According to Baxter and Jack (2008) case study is by far the best method to address the
context issue. Moreover, the qualitative research study is useful when researchers want
to explore a phenomenon within a context. Since exploring the phenomenon and its
context helps to better understand all aspects that affects and shapes the phenomenon
(Baxter, 2008). Baxter and Jack (2008) also said that a case study in an organizational
research usually concerns people or groups of people that are operating within and
around the organization. Thus, this research seeks to explain the phenomenon by inves-
tigating the role of the local management of a fast food company and its affect of the in-
novation process. The layer that is of particular importance for this study is the local
management. However, since the company headquarters and other players that also has
a considerable stake in the organization, and therefore influence the innovation process,
will be included in this study. An example of these stakeholders is the independent con-
tractor called “development agent” in Subway, whose function is to supervise franchi-
sees in the field.
3.2 Pilot study
Before establishing the purpose of this thesis, a pilot study was conducted in order to
get an increased knowledge regarding the general mindset of local restaurant manage-
ment, when it came to new innovations and technology. This study, which took place at
several restaurants and cafés in Jonkoping, made the authors realize that not every res-
21
taurant and café was interested in new innovations and technology. When asking man-
agers at local restaurants and cafés about implementing new innovations such as SST´s,
the managers saw more losses than benefits. The general response was that by installing
a SST the restaurant would lose the personal service which counted for up to 40% of the
restaurant experience, according to a manager at Twin City.
During the pilot study, it became clear that restaurants and cafés did not want to speed
up the ordering process by implementing new innovations and SST´s. Instead, they
want to focus more on personal service and make sure that the customers stays satisfied
during their stay in the restaurant. However, during the interview with a fast food res-
taurant manager, he pointed out that the industry (fast food) tends to focus more on time
and speed than “normal” restaurants. He also saw the ordering process as a “bottle-
neck” which could be improved by implementing innovations such as SST´s.
Therefore, the authors decided to only focus on the fast food industry while continuing
their work on this thesis.
3.3 Case selection
3.3.1 Location of Research
A several number of international fast food franchises operates in Sweden, for example;
McDonald’s, Burger King, Pizza Hut and Subway. Together with several Swedish
branches, for example Frasses, Max and Sibylla the supply of fast food restaurants in
Sweden is relatively high. Since the amount of fast food restaurants in Jonkoping keeps
growing, with a new Max restaurant, a new Subway restaurant and a Burger King res-
taurant opening as late as last fall (Fall 2010), it is also fare to say that the fast food i n-
dustry in Jonkoping is at least successful. Jonkoping also has a geographic location that
allows many travelers to pass through the city and will therefore beneficially serve as
research location for this thesis.
3.3.1.1 Subway
Subway is an international fast food franchise with over 34 600 franchisees in 98 coun-
tries (Subway, 2011, 20 May). Subway is currently listed number 9 in the Entrepre-
22
neur's 2011 Franchise 500® list as one of the fastest growing franchise systems in the
world (Stapp, Februari 2011) Additionally, Subway overtook McDonald’s as the
world’s largest restaurant chain earlier this year (BBC News, March 9, 2011). Subway
also was the most popular international fast food franchisee in Sweden last year (2010),
according to a market research conducted by ISI Winning (2011) and took the 3rd place
in most popular fast food company in Sweden, after the two domestic companies Max
and Sibylla. Subway is entirely franchised and owned by Doctor´s Associates, Inc.
(DAI) according to Lewin-Solomons (1999). DAI consists of a few number of people,
therefore they do not have the power to supervise and support the franchise. Instead, the
Subway Franchise Owners Advisory Council, (SFOAC) provides support to the franchi-
sees and supervising the franchise is delegated to independent contractors (Lewin-
Solomons, 1999)
Two of Subway´s franchisees are located in the city center of Jonkoping, Sweden. In
comparison to the other international franchises located in Jonkoping, (McDonald’s and
Burger King) Subway´s ordering system is focused on individual choices, where every
customer makes an order in 7 different stages (see appendix 3)
This relatively intense ordering process demands a higher involvement from the cus-
tomer than in other fast food franchises. In other fast food franchises the meals are more
or less pre-set (i.e. if the costumer do not tell the restaurant that they want something
removed, added or changed, they restaurant will offer the customer the original pre-set
menu).
Subway was a subject to a tremendous sales increase which was caused by the initiative
of a small “subway” shop owner Stuart Frankel. During the times of recession, he
started offering a footlong Subway sandwich for 5$ which was about 1$ dollar cheaper
than before. Surprisingly, this change in price was very appealing to the customers. The
idea quickly spread among other Subways all around the world and generated remarka-
ble 3.8$ billion sales throughout the chain. This idea even reached Swedish franchisees,
where they had an opportunity to sell footlong sandwiches for 55 SEK. “Frankel's $5
footlong idea illustrates how a huge company can wake up and eventually seize on a
good idea that's not generated at headquarters” (Boyle, 2009).
Therefore, the authors of this thesis believed that the implementation of a SST at Sub-
way would have a greater benefit to its customers (and personnel) than in any other fast
23
food franchise operating in Jonkoping. The local management should therefore be more
interested in the innovation and more motivated to participate in this research.
3.3.1.2 Max
Max was the most popular fast food company in Sweden last year (2010), according to
a market research conducted by ISI Winning (2011). It is also one of the largest Swe-
dish fast food restaurant chains, with currently 82 restaurants located in Sweden, with
three company owned restaurants located in Jonkoping (max.se, 20 May). The head-
quarters are located in Lulea, Sweden. The restaurant located at Ekhagen nearby the
highway E4 already has an SST implemented in form of an “Express-cashier” where the
customers can make their orders and pay by credit card and then receive their orders at a
specific “Express-cashier” handout desk.
The authors believed Max to be a good opposite to Subway. Max already had started
implementing SST’s in Jonkoping and since the majority of restaurants are company-
owned, it would provide the authors with a different setting. Additionally, Max origins
from Sweden where it exclusively operates in comparison with Subway which origi-
nated in the U.S. and then expanded abroad and now operates globally.
3.3.2 Selection of study units
In statistical sampling, “bias” is considered a weakness and should be avoided. Howev-
er, this approach is considered as strength in a qualitative research. The idea behind “bi-
ased sampling” or so called “purposeful sampling” is to select information-rich cases
from which authors can learn about issues which are of great importance when answer-
ing research questions (Patton, 2002)
The most important thing when selecting cases was to find companies that had very dif-
ferent proportions of franchisee and company-owned establishments in their organiza-
tion. It was also not feasible to include all restaurants in this research due to lack of
time. Therefore, the authors choose to use purposeful sampling to represent two typical
organizational structures that comprise fast food companies: franchise and company-
owned outlets.
Thus, Subway and Max were seen as the best choices, because the former company is
entirely franchised while the later being almost entirely company-owned, except one
24
single franchisee. Additionally, another reason for choosing these two companies was
the fact that both of them have implemented SST´s in some of their restaurants. Max
has implemented this type of innovation in one of the restaurants located in Jonkoping
while Subway has implemented this type of innovation in restaurants located in the U.S.
Therefore, by selecting Max and Subway authors of this thesis are confident that the
study units are innovative and not afraid to experiment with new technologies.
3.4 Data Collection
In order to fulfill the purpose of this research, the authors conducted interviews with
employees and restaurant managers within Subway and Max-restaurants located in Jon-
koping. The aim of these interviews was to get an increased knowledge regarding the
organizational structure and the decision making process within these two companies.
First, an initial contact was made over phone in order to book a meeting and to discuss
the purpose of the thesis with the managers. A meeting at the local restaurants then took
place in order to analyze the current mindset, knowledge, interest and power of the local
managers regarding the implementation of SST´s and other innovations.
Semi-structured interviews with the restaurant managers were used in order to receive
background information regarding the restaurant and the manager. By using a semi-
structured approach, the managers were free to talk about their situation and/or issues
regarding their contact with the higher level managers, while the authors lead the inter-
views with questions so that the interview maintained relevant for the research.
(See Table 2).
According to Bouchard (1976), interviewing takes advantage of language, which is the
most powerful form of communication among human beings and a tremendous amount
of time and effort could be saved by asking questions in order to retrieve information.
(Bouchard, 1976).
After the initial pilot study, the authors conducted interviews at five different fast food
restaurants located in Jonkoping: three Max-restaurants and two Subway-restaurants.
The internal names for the Max-restaurants were numbers according to their “chrono-
25
logical order” (i.e the first Max-restaurant was called “Max 1”, the second “Max 2” etc.
Therefore, the managers interviewed in this research will be named according to their
restaurant: manager at “Max 1” will be called “M1” etc.) The same system was also
used by the authors when referring to the two Subway managers (i.e S1 and S2).
After interviewing the local management within Subway, authors received two different
views regarding the communication and the decision-making process. Therefore, the
authors felt a need for contacting higher level management in order to sort out these
views and to receive additional information.
Table 2. Overview over the restaurants, interviewees, place, time, length and language
of interview.
Restaurant Name Place of in-
terview
Length
of inter-
view
Time &
date
when in-
terview
started
Language of
interview
Pilot study
Twin City Bar 10 min February
3,
11.00am
Swedish
Coffeehouse by Geor-
ge
Order desk 10 min February
7,
09.00am
Swedish
Wayne´s Coffee Customer
dining area
10 min February
8,
09.00am
Swedish
Subway, Filmstaden Customer
dining area
20 min February
9, 3.00 pm
English
Fast food restaurants
Manager at Max Jordb-
rovagen
M1a Staff dining
room
40 min
combi-
ned
April 6,
6.00 pm
Eng-
lish/Swedish*
Assistant Manager at
Max Jordbrovagen
M1b
Manager at Max Herku-
lesvagen
M2 Kitchen of
the restau-
rant
12 min April 15,
09.45am
Swedish
26
Restaurant Name Place of in-
terview
Length
of inter-
view
Time &
date
when in-
terview
started
Language of
interview
Manager at Max Ekha-
gen
M3 Customer
dining area
25 min March 3,
09.00 am
Swedish
Manager at Subway
East
S1 Customer
dining area
30 min April 5,
10.00am
English
Manager at Subway
Filmstaden
S2 Customer
dining area
20 min
May 4,
3.30 pm
Swedish
Confirmation interviews
Amsterdam Customer
Service and Communi-
cation coordinator
AC E-mail-
conversation
May 10 English
Regional manager,
Subway
RS Phone inter-
view
20 min May 17,
10.00 am
English
Regional manager,
Subway
RS Phone inter-
view
8 min May 23,
09.00 am
Swedish
Manager at Subway
Filmstaden
S2 Outside ser-
ving area
5 min May 23,
09.14 am
English
Manager at Subway
East
S1 Customer
dining area
15 min May 23,
2.00 pm
English
* The interview started in English, however due to language constraints the language
changed to Swedish in order to maximize the information from the interviewees.
3.4.1 Language of the interview
Regarding the language of the interviews, the aim was to use English in order to minim-
ize the risk for translation errors. However, since the research was conducted in Jonkop-
ing, Sweden and the interviews were held with Swedish managers, the majority of the
interviews were held in Swedish in order to make it as convenient as possible for the in-
terviewees. By using their native language, the managers felt more comfortable in the
situation and could supply the interviewers with more in-depth answers and express
27
their thoughts and opinions in a more detailed way. Two of the authors are native
Swedes, which made it possible to conduct these interviews in Swedish.
The empirical data received from these interviews was then translated into English and
transcribed in order to suit the thesis. The interviews were recorded in order to allow the
interviewers to focus on the interviews and to minimize the risk for errors and misun-
derstandings which could appear while taking notes. Permission of recording the inter-
views was given from the interviewees, before the recording started.
3.4.2 Interview Techniques
One of the main goals during the interviews was to keep the interviewees motivated and
interested during the entire interview, in order to receive as much information as possi-
ble from the interviewees. Another important aspect is that the interviewee feels com-
fortable in the situation and can trust the interviewer. Bouchard (1976) discuss some
useful tactics that could be used in order to achieve these goals:
1. Maximize privacy
An interview should take place in a setting where no one can overhear the interview.
The interviews took place in the respective restaurant, with the interviewees choosing
the specific location. This seemed to be the best solution, since it would be a place
where the interviewees would feel comfortable while it also gives the interviewee the
opportunity to decide the level of privacy.
2. Know whom you are talking to.
During the initial contact with the restaurants, a request to talk to the manger was
made. Names of people the authors were in contact with was noted and used during
the interviews.
3. Maintain neutrality
No bias information was shared by the interviewers. The role of the interviewer was
exclusively to retrieve as much relevant information as possible from the interviews
and to let the interviewees express their own thoughts and opinions to their fullest.
28
4. Maintain confidentiality
No specific information regarding an interviewee was shared with another intervie-
wee. The interviews were held confidential. (However, some information regarding
other interviewees was shared, see “Tactic no.7”).
5. Listen
Listening during an interview is just as important as obvious. Not showing interest as
an interviewer leads to decreased motivation and interest for the interviewee. There-
fore it was highly important for the interviewer to be listening during the interview,
even though the interviews were being recorded. By listening to the interviewee the
interviewer was also able to know if any follow-up question could be asked in order
to retrieve a more in-depth and detailed answer.
6. Cooling out
During an interview, there exist a risk that the interviewee reveals “too much” or
classified information. This could lead to a more reserved attitude in future inter-
views, especially of the interviews range over a long period of time and with other in-
terviewees, according to Bouchard (1976). In order to prevent this, the interviewer
utilized the “cooling out”-technique by ending the interview in a more relaxed man-
ner. This will lead to a decreased risk for reserved attitude in future interviews, ac-
cording to Bouchard (1976).
7. Inform all respondents about who will be interviewed and how they were
chosen.
According to Bouchard (1976), it is important to inform the interviewee about why
he/she was chosen for the interview. Along with additional information about who
else was participating in the research, uncomfortable questions from the interviewee
regarding the selection of interviewees could be answered.
The authors informed the interviewees about why they had been chosen for the inter-
views, together with information about who else will be, or has been interviewed dur-
ing the research.
29
8. Identify yourself.
For the interviews conducted in this research the initial contact was made over phone,
where the researchers presented themselves and the purpose of the interview. Addi-
tionally a short introduction about the research and the authors was made at the inter-
view in order to let the interviewees know who the authors were and why the inter-
view was conducted.
3.4.3 Interview guide.
According to Patton (2002, p 343-344): “An interview guide lists the questions or issues
that are to be explored in the course of an interview”. Interview guide is important to in-
sure that respondents are being asked more or less the same questions. Interview guides
can be very detailed or it can be less detailed, which depends on two things: (1) the ex-
tent to which researchers are able to identify the important topics beforehand, and (2)
the researchers’ willingness to ask questions in the same order to all interviewees (Pat-
ton, 2002).
By looking at the previous research, the authors of this thesis have been able to identify
the relevant topics that had to be discussed with respondents in order to fulfill the pur-
pose of this thesis. The main topics that emerged from the theoretical framework and
were covered in the interviews were the following:
Origins of creativity within organizations
The amount of power local management holds when it comes to innovations.
Degree of independence over decision making.
Knowledge about Self-service technology
Patterns of communication within organization.
Vertical communication between local management and higher level managers.
Horizontal communication among local managers.
Effectiveness and frequency of communication
Different support mechanisms from higher managers to local management.
30
3.5 Data analysis
“The analysis of case study evidence is one of the least developed and most difficult as-
pects of doing case studies.” (Yin, 2003, p 109). By this, Yin (2003), mean that re-
searchers often begin a case study without knowing how to analyze the results.
3.5.1 Inductive vs. Deductive approach
Patton (2002) defines inductive analysis as discovering patterns and thesis that emerge
from the data collected. In contrast, deductive approach is when the data is being ana-
lyzed in relation to the previously developed theoretical framework. Patton (2002) ar-
gues that qualitative analysis is typically inductive at the beginning where themes, cate-
gories and patterns emerge. After these have been established, the deductive approach
can take place when testing and affirming the validity and suitability of the inductive
content analysis.
However, Patton (2002, p. 454) also discusses Analytic induction as a way to analyze in
qualitative research. He states: “Analytic induction… begins with an analyst’s deducted
propositions or theory-derived hypotheses”; “and then inductive … when analyst begins
by examining the data in terms of theory-derived sensitizing concepts or applying a
theoretical framework developed by someone else”.
Gilgun (1995) added:
“In analytic induction, researchers develop hypothesis, sometimes rough and general
approximations, prior to entry to the field. These hypotheses can be based on assump-
tions, careful examination of research and theory, or combinations. Hypothesis are re-
vised to fit emerging interpretations of the data over the course of data collection and
analysis” (Gilgun, 1995, p. 268-69).
In the beginning the authors of this thesis were using propositions as a tool to guide the
process of the analysis. However, propositions were derived from the research ques-
tions, which in fact were derived from the theoretical framework. So, the authors of this
thesis decided to use only research questions and incorporated the propositions in to the
research questions, since they both stated the same.
Thus, the authors of this thesis deducted theory to the research questions instead of
propositions. Later, authors examined the data by linking it to the theory-derived con-
31
cepts developed in the theoretical framework. As well as applied Rogers’ Diffusion of
Innovation to a fast food restaurant setting.
3.5.2 Cross case analysis
Analytic induction, which is the strategy used for this thesis, also includes cross-case
analysis or “qualitative comparative analysis” as a tool to search for explanations of the
phenomenon under study (Patton, 2002, p. 492). Denzin (1978) identified that in analyt-
ical induction one can use cross-case analysis to compare carefully prepared case stu-
dies and then use this comparison to explain the phenomenon.
Ragin (2000) defined cross-case analysis as “qualitative comparative analysis”, which
focused on making systematic comparisons among a number of cases. Ragin (2000) has
used this approach, which entailed taking into account both the uniqueness and commo-
nalities between the cases, thereby explaining similarities and differences between them.
3.6 Trustworthiness
Shenton (2004) has derived some strategies for ensuring trustworthiness in qualitative
research projects by combining and discussing several researches on the subject. Dis-
cussing the trustworthiness of a research, four main issues are addressed; credibility,
transferability, dependability and confirmability. These will all be addressed below.
3.6.1 Credibility
Shenton (2004), discussed several strategies to ensure credibility of the research. The
authors focused on some of them:
1. The adoption of research methods well established.
The adoption of research methods well established is the idea of using proved methods
of gathering data, construct questions etc (Shenton, 2004). In this thesis the authors
have made extensive research on the subject to find previous research that was of great
importance for this thesis. By this, the authors were able to find strong and relevant
theories for their thesis. Most of the researchers, especially those studying entrepreneur-
ship within franchise systems (Lewin-Solomons, 1999; Sundbo, 2010) and plural forms
within franchising (Bradach, 1997), were using a case study approach. These articles
guided the creation of relevant research questions and purpose of this research, which
32
were adjusted slightly after conducting a pilot study. Since the aim of this thesis was to
explore how the local management affect the innovation process, within fast food res-
taurant chains, using a case study approach seemed to be the most suitable. Hence, this
thesis bases its theories, concepts and approach on previous and well established re-
search.
2. Tactics to help ensure honesty in informants.
The participants should be given the opportunity to refuse participation of the data col-
lection. It is also important that the participants feel that they can speak freely, contri-
bute with ideas and share their experience without being afraid of losing credibility to
higher level management (Shenton, 2004).
For this thesis, the main data collection tool was interviews. During these interviews the
tactics by Bouchard (1976) was implemented to ensure that the interviews where prop-
erly conducted. By utilizing Bouchard´s (1976) tactics and an informal structure of the
interview, the authors were able to create a relaxing atmosphere. The participants were
allowed to speak freely and encouraged to share their experiences. In addition, by keep-
ing confidentiality, no information from interviews was revealed to other managers. So
by the tactics derived from Bouchard (1976), the authors of this thesis strived towards
ensuring honesty from the informants.
3. The researchers “reflective commentary”.
The researchers should evaluate their own work as it progresses. A reflective commen-
tary part may be constructed to discuss effectiveness of methods, initial analysis of data
collection etc (Shenton, 2004).
A reflective commentary part has not been included in this thesis, however, throughout
the research the authors have constantly evaluated the ongoing work. Some discussion
takes place in the discussion section in the end of the thesis. Additionally, the benefit of
being three researchers is clear in the evaluation process, since it will immediately be
evaluated by three different minds.
33
4. Examination of previous research:
In order to increase credibility, one aspect can be to investigate how the research cor-
responds to previous research made in the same organization or issue (Shenton, 2004).
Research about Subway as well as related issues was found and discussed by the au-
thors of this thesis. A majority of the findings of this thesis corresponds to previous re-
search, which increases the credibility of these findings.
Taking all this (these strategies) in to consideration, this thesis is credible due to the fact
that: It is based on well established methods, honesty of the participants is considered to
be achieved , critical self-evaluation has been made by the authors and findings has
been compared to previous relevant research.
3.6.2 Transferability
In order to increase the transferability of the research, some information regarding the
method should be provided. Shenton (2004), mention several important aspects that
should be addressed. These are: The number of organizations taking part and their loca-
tion, any restrictions in people contributing to the data, number of participants in the
fieldwork, data collection methods, number and length of data collection sessions and
the time period which the data was collected.
This information is shown in Table 2 where it is easy to see when and how the inter-
views were conducted. Further information is discussed in the method section.
Additionally, the authors believe that this research is applicable not only to fast food
restaurants, but also other types of companies. A local franchise manager or local man-
ager at a company-owned outlet in a retailing company is likely to share similar expe-
riences as the fast food managers. Therefore this research could apply to all companies
that utilize either franchise or company-owned outlet system to operate their business.
3.6.3 Dependability
“In order to address the dependability issue more directly, the processes within the
study should be reported in detail, thereby enabling a future researcher to repeat the
work, if not necessarily to gain the same results.” (Shenton, 2004, p. 71.)
34
Shenton (2004) also mentions three aspects that should be incorporated in the research:
The research design and implementation, detail of data gathering, reflection of the
project.
For this research, the authors have described the research process and the tools for ga-
thering data to the best of their ability. The authors believe that a replication of this re-
search is possible, however, if performed in a different setting or location the result may
not be the same. Although, when it comes to dependability, this thesis is very much rep-
licable.
3.6.4 Confirmability
Confirmability is another strategy to ensure the objectivity of the research. A detailed
method on how the research was conducted is important, in order for the reader to de-
cide whether the research has been objective (Shenton, 2004). Also, the authors have to
make sure that the result comes from the participants who provide the researchers with
information, rather than the result coming from the researcher’s beliefs. Additionally,
Shenton (2004), also mentions the “reflective commentary” as an important mean of
dealing with confirmability.
As stated above, the authors of this thesis have written a detailed method section and
explained step-by-step how the research was conducted. Throughout the research, the
authors have been reflective and critical to findings and methods used.
3.7 Interpretation of the data
Lofland (1971, p. 62) argued that it is suitable to “provide an orderly description of rich,
descriptive detail” or in other words – to interpret the data. Patton (2002, p. 480) de-
fined interpretation as “attaching significance to what was found, making sense of find-
ings, offering explanations, drawing conclusion … imposing order on an unruly but
surely patterned world”. In this thesis authors interpreted rich data in order to make
sense of what was found, offered explanations and drew relevant conclusions. Patton
(2002), by judging from Schlechty and Noblit (1982) conclusions, explained that stake-
holders of any research expect three things:
“(1) Confirm what we know that is supported by data, (2) disabuse us of misconcep-
tions, and (3) illuminate important things that we didn’t know but should know. Ac-
35
complishing these three things and those interested in the findings can take it from
here”.
Authors of this thesis have found a lot of data that confirmed findings derived from
theoretical framework. Additionally, authors also managed to find important things that
were not stressed by previous research, such as the fact that a “Subway” restaurant can
be creative as long it implements innovations outside the “Subway” restaurant. Thus,
the stakeholders are left free to judge these findings and make their own interpretations.
36
4 Results
In this section the authors will present the result of the research. This result has been
categorized under different headings in order to increase the readability.
4.1 Current relationship with SST’s
4.1.1 Max
Max Ekhagen (the newest Max restaurant located in Jonkoping which opened up in
September 2010) is the only Max restaurant in Jonkoping which already has a SST im-
plemented. An “express-cashier” where customers can order and pay via a touch-screen
and then receive their order at another cashier. From day one, the SST has been running
in the restaurant and improved the ordering process for customers, M3 said. The prima-
ry benefit of using this SST is that it increases the speed of orders with the secondary ef-
fect that it also decreases labor costs since it replaces up to three normal cashiers, M3
explained. M3 only saw benefits with using the SST, except in the beginning when
some employees left their normal cashier in order to serve the SST cashier. The SST has
the highest ranking of all the different cashiers at Max (1. SST, 2. Drive-In, 3. Normal),
however M3 said that “even though it is our highest priority, the other customers should
not be left alone.” This kind of SST is part of a specific Max restaurant model which ex-
ists at around seven other locations in Sweden, according to M3. M3 said that the instal-
lation of the SST was already made when he became manager at Max Ekhagen, there-
fore M3 did not have any power over the implementation.
The other two Max restaurants have had visits regarding the possibilities for a SST-
implementation, however, no implementation has been made due to lack of space, ac-
cording to all the local Max restaurant mangers. When asking about the lack of an “ex-
press-cashier” both M1a and M2 pointed at the regular cashiers and answered humo-
rously: “We have four express-cashiers already”. M2 said that he had great knowledge
about SST´s in general, but not to work-related technologies. All the cashiers within
Max, both SST and normal cashiers, are connected to a company in Lulea where the
servers are located and where they store all the data, M2 said. The computers at the lo-
cal restaurants are just empty shells, he continued. Even though the type of SST located
at Max Ekhagen most likely will not be implemented at Max Herkulesvagen, M2 said
that other types of innovations and SST´s will most likely be implemented., for example
37
the ability to pay via Internet.. The people up in Lulea think ahead and about the future,
he added.
4.1.2 Subway
Neither of the two Subway restaurants are currently using any form of SST, however S2
is aware of the existence within Subway and thinks it will reach Swedish Subway res-
taurants and Jonkoping in a couple of years: “It is like everything else, now it is a really
big thing in the US, but it will not be here until 3-4 years.” he said. He mentioned the
possibility to order online, which now is reality in Subway restaurants in the US, as an
example. S1 was not familiar with any form of SST, neither was he aware of the possi-
bility to order online in the US. When asked, S2 were not sure if he needed a SST, how-
ever “it will probably cause more good than bad”, he said.
4.2 Comparison with competitors
4.2.1 Max
When discussing the restaurants strengths and weaknesses towards their competitors,
M1b quickly made comparisons with McDonald’s.
“McDonald’s make fast food and it works like a robot. No feeling, it is only about func-
tionality and money. Max employees on the other hand, they work more as humans, with
ups and downs but with more feeling in the food”, M1b said.
Both M1a and M1b explained this difference with Max being a family owned restaurant
and that it is easy for the personnel to know who is in charge. At McDonald’s the em-
ployees just work and they do not know who the top manager is, M1a continued. The
strength, according to M2, is that Max is Swedish and all the decisions are made in
Sweden.
Customers at Max are more willing to wait an extra minute for the food, therefore it is
more likely to call Max a “restaurant” than to call McDonald’s a “restaurant”, according
to M1b. When asking about any weakness within the restaurant M1a answers that Max
market themselves as the best restaurant in Sweden, therefore no weakness can be men-
38
tioned. However, M1b made a comparison with the “robots” at McDonalds and said:
“We are like a human, we have human weaknesses”.
4.2.2 Subway
The strengths at Subway are the fresh food and the ability for customers to see it, ac-
cording to S1. Even though neither of the Subway-managers could recognize any weak-
nesses, S2 discovered an external problem: “Swedish customers are too nice” he said.
American customers know exactly what they want and how they want it, S2 continued.
“Swedish customers are not used to make their own decisions when it comes to eating,
instead they look at a menu and want to choose from it.” he added.
4.3 Communication
4.3.1 Max
While discussing the company-owned structure within the restaurant, M1b explained
that there exists one Max franchise, Max Arlanda. Max is also currently broadening
their operation into Norway, where a Norwegian family-owned company has bought the
franchising rights, M1b said. However, staff from Max Sweden will support the new
franchisee during the start up process, M1a added. M1a and M1b then continued to talk
about why it do not exist that many franchisees within Max and concluded:
“It is because everyone in the company is concerned about the brand. For example, al-
most every manager within Max is recruited from within the company” M1b said.
Continuing with talking about their contact with higher managers, M1a said that she
should have better contact with their regional manager, but that they do have weekly
meetings every Monday. There will be a change in the region and a new manager will
be added and located in Jonkoping, M1a said. Both M1a and M1b hoped that this
change will improve the contact with the regional manager. The owners of Max usually
visit the restaurant once or twice per year, M1a said. A monthly newsletter is also sent
out from the higher managers and if they have done something really good, the restau-
rant will receive an additional e-mail. Even though there is room for more communica-
tion between the local and higher managers, M1a did not feel that there existed a need
for any change regarding the communication.
39
M1b talked about rewards and encouragement and stated that it did not really exist,
however it was always possible to bring new ideas to the table. Everyone had the ability
to send ideas to the higher or top managers and receive a response. Max also has a com-
pany magazine with greetings from every district manager as well as greetings from
other personnel which is distributed quarterly, he said. M1a continued to talk about the
vertical integration and said that if they had any problems or issues they could easily
talk to their higher level managers. First, local managers are recommended to talk to
their regional manager, and if that do not work it is possible to, in worst case go to the
owners directly, M1a said. “The regional manager of Jonkoping has a position in the
Board of Operations of Max, therefore it is very easy to share any opinion or thought
with the top managers” M2 added.
Addressing the horizontal communication among the local management, M1a said that:
“Regional meetings for managers are held quarterly, with all the managers within the
region. Larger meetings and conferences with every Max restaurant manager in Swe-
den is held once a year, however during a startup process or when becoming a manag-
er, more meetings and educations occur” (M1a)
Both the vertical and horizontal contact was perceived as good, according to both M1a
and M1b. The local managers had more horizontal contact but received good response
from higher level managers as well, M1b said. Something that M2 confirmed. The man-
agers in Jonkoping meet on monthly basis to discuss the current situation and to plan for
the future. The Max personnel in Jonkoping also play floorball on regular basis, accord-
ing to M2.
Within Max it is also possible for the employees to transfer between the restaurants,
M1b said. When a new restaurant is opening up, employees from nearby restaurants will
assist the new restaurant with workforce and education during the first couple of
months, M1b continued. M1a added that when she felt insecure she could call M2 and
ask for help. Something that occurred nearly on a daily basis, according to M1a.
40
4.3.2 Subway
The vertical communication within Subway was perceived as good, according to both
S1 and S2. They both felt that they got the support they needed from higher level man-
agement.
However, in the beginning S1 did not have as much support because “the development
agents were old and tired, but the new agents are better.” S1 said. S1 continued to say
that the development agents made monthly check-ups to see if the restaurant was fol-
lowing the rules and standards. RS confirmed that monthly visits were made and added
that it was mainly to ensure that the restaurants were following the operations manual
(internally called “the Subway Bible”).
Daily e-mail contact between the headquarters and the local restaurants also existed, ac-
cording to S1. S2 agreed that frequent e-mail contact existed, but used the description
“minimum once a week” when asked how frequently. When asked about the purpose of
these e-mails, S2 explained that e-mails were used for communicating all kinds of is-
sues that were of particular importance to local and higher level management and could
include marketing campaigns, news from headquarters, problems, suggestions etc.
When discussing this type of communication, S2 said that he was very satisfied with it
and claimed that e-mails was a good way to reach the higher level management. Mainly
because of two reasons; (1) it was a two way communication, meaning that both local
and higher level management could use e-mails to communicate with each other and (2)
e-mails were frequent, with fast responses from higher level management. S1 agreed
and did not see any problems with the e-mail communication.
Another form of communication that existed within Subway was phone-conferences
that occurred four to five times per year and included all the franchises in the south of
Sweden, according to S2. Both the franchisees were satisfied with this type of commu-
nication as well and S1 added that “a lot will depend on what type of person you are. If
you are more aggressive and like to express your opinion, then you will be better
heard”. For “shy” franchisee managers, S1 added that e-mail communication always ex-
isted at their disposal.
41
S1 mentioned that they usually got information about new franchisees such as, how and
where they were launched. In addition franchisees could also present new ideas. S2
added that sometimes during these conferences they could vote regarding important de-
cisions. For example, franchisees in the south of Sweden recently voted for new rules
on how to distribute advertising funds, according to S2. However, decisions that usually
got made during these conferences focused on new sandwiches, coupons or other mar-
keting related issues, according to S2. Even though general horizontal communication
existed within the franchise, no local communication or collaboration was discovered.
S2 mentioned that some attempts to collaborate had been made, however no one of the
franchisees could explain why they did not collaborate.
All the franchisees in Sweden are divided into four parts: North, West, South and East.
Each of these regions has a regional manager who overlooks the franchisees in that par-
ticular region and usually acts as a development agent for them, said S1. Annual meet-
ings occurred once per year with all the franchisees and regional managers in Sweden.
Sometimes during these meetings, franchisees voted for the implementation of a new
innovation. S1 gave the example of the promotional campaign “Sub of the day”.
S2 said that, if he had any suggestions regarding improvements or innovations, he
would try to get in contact with the regional managers in Gothenburg who then would
try to contact the U.S. headquarters. He continued by saying that he sometimes called
the managers in Gothenburg three to four times without any respond and that it was
“generally hard to get in contact with them”. S2 also added that the regional managers
in Gothenburg were the only higher level managers he came in contact with, unless he
chose to contact the U.S. directly. This sometimes occurred when there was a problem
with the checkout-system etc., according to S2. S1 said that when suggesting a new in-
novation he would contact the regional managers, however the regional managers would
then contact the European headquarters in Holland, according to S1.
Initially, S1 said that he would contact the “development agent”. However, during a
phone-interview with the regional manager, the regional manager explained that he was
also the development agent. The regional manager/development agent added that the
42
recommended way of communication was through the European headquarter in Hol-
land. However, he also added that “it is really not that clear... I would vote for Holland.”
Additionally, there existed two different types of national committees within Subway; a
marketing committee and a product committee, according to RS. They discussed if any
changes should be made within the assortment of the franchisees or if any other food- or
marketing related changes should be made. RS said that the franchisees had more repre-
sentatives in the marketing committee than in the product committee, due to a lack of
interest for the latter one. RS further explained that the marketing among the franchisees
was not controlled by Subway. “It´s a separate company...which is owned by all the
franchisees” RS said.
Neither of the two franchisees knew about the existence of the product committee. They
only knew that there existed a body which represents franchisees when it came to mar-
keting and that franchisees can nominate themselves and get elected. S1 mentioned that
he got this information in one of the e-mails sent to him.
Even though there are numerous ways how franchisees can communicate with higher
level management, S1 and S2 assured that they did not feel confused because of that
and they seemed to knew exactly which channel to use in the any particular situation.
4.4 Innovation, changes and power distribution
4.4.1 Max
Talking about creativity and the innovation process, M1a said that “it comes from
above, since they have time to think about it every day.” New innovations and non-local
changes within Max, for example introduction of a new burger, will come from the
headquarters, according to M3. The same if the grills need to be replaced, M2 added.
Something that headquarters recently decided to do. The headquarters notified the local
managers about it four months in advance and then came and installed the grills during
two nights, M2 said. The new grills are part of a new cooking concept, where the old
“slim-food” approach will be broaden into a gourmet way of thinking, according to
M1b.
43
M1a admitted that unnecessary changes had been made due to decisions made by higher
level managers and not by the personnel at the local restaurant.
M1b filled in that it was usually a great idea in theory, but very hard to solve in reality.
The higher level manager came up with an idea and said: “This is how you should do
it.”, but it does not work like that, M1a said. It is up to the local managers to solve the
problem and make it work, M1b continued. The phenomenon of unnecessary changes is
something that sometimes occurred for M2 as well. “But you get used to it” he said. M2
said that he had pretty much control over these situations and added that he had the pos-
sibility to share his thoughts and opinions with higher level managers.
“I am not sure if they listen to me, but at least I can say what I am thinking”, M2 said.
When asked if there existed anything they would like to change within the restaurant,
M2 said that he would like to make some small changes and mentioned the drive-in as
an example. “But it is not my wallet”, he added.
Overall, both M1a and M1b were satisfied with the decisions that came from higher
level managers, however some specific changes or improvements took too long time to
be made. For example, a new ice-cream machine. “It breaks down every summer.” M1a
said. M1a continued to say that Max Jordbrovagen is the oldest Max restaurant in the
south of Sweden, therefore higher level managers should get them a new ice-cream ma-
chine, according to M1a.
Asking about their personal interest of having more power, M1a answered “Not right
now, ask me in a year”. M1b answered that:
“It is important that Max maintains control over the restaurants and keeps every res-
taurant the same, otherwise every restaurant will look different. It should be the same
all over so that a customer can eat and experience the same everywhere” M1b said.
However, “Stockholm is Stockholm” M1a said and refereed to that the restaurants in
Stockholm sometimes introduces new hamburgers that are not served in the rest of
Sweden.
Talking about the decision making process, M1b explained that the local restaurants
themselves are responsible for marketing, as long as they get approval from higher level
managers before. There exist local marketing campaigns, with all the Max restaurants
44
located in Jonkoping. No marketing is made individually for one single restaurant, M2
said. The need for higher level manager´s approval also takes place when it comes to
making other changes within the restaurant, although “minor” changes can be made
within the restaurant without the approval from higher level managers, according to all
the Max restaurant managers. During the interview with M2, he revealed that a change
becomes “major” when the cost exceeds 10 000 SEK. However for a change around
9000 SEK he will need to provide good arguments for it, he added. It also depends from
person to person, M1b said:
“If a manager have been working at a restaurant for 10 years and someone else is
working on a trail employment, obviously the experienced manager will get more power
over making changes” M1b continues.
4.4.2 Subway
The manager in Amsterdam, AM, alleged that a lot of innovations came from the fran-
chisees and mentioned the tremendously successful “5 dollar footlong” campaign. RS
confirmed AM’s argument by stating that all the ideas that reached the food and market-
ing committees were initiated from the franchisees. RS said that his communication
with franchisees was more formal and revolved around compliance to the standards and
rules which were stated in the operations manual. S1 could negotiate and argue for a
change that seemed to be unnecessary and then reach a compromise with the develop-
ment agent. However, creativity could not violate the regulations set up by the opera-
tional manual.
“They can’t tell me to put the table in the middle of the room, but if I had a soda in the
fridge that I was not allowed to have they would say that I have to take it away, I would
not have anything to say about that.” S1 said.
RS explained how the innovation process would look like if a franchisee would like to
reach out with a new idea to the top management. The idea would first reach the product
or marketing committee then, after an evaluation of the idea and if considered interest-
ing, the idea would be forwarded to the U.S. headquarters. The U.S. headquarters would
then make a decision regarding the new idea. In some cases, the decision of a national
voting among all the Swedish franchisees would take place, and then replace the evalua-
tion made by the committee. However, the final decision would still need to be made at
45
the U.S. headquarters. These new ideas will then be implemented to all the franchisees,
with some exceptions within marketing related issues, according to RS. S2 mentioned
an example with a meatball sandwich, where the managers voted for it, with a majority
of the managers being against it. This led to the meatball sandwich getting removed
from all the Subway restaurants. “They had to remove it completely so there won´t be
any collision, because it is a chain after all”, S2 said. However, sometimes different
campaigns occur with selected restaurants around Sweden. As an example, a campaign
offering a foot long sandwich for 55 SEK was launched at selected restaurants. The re-
gional managers asked S2 if he wanted to participate in this, something that he chose to
do, S2 said.
Thus, even though RS was keener to articulate Headquarters in Amsterdam as a final
recipient of a new idea, he was at the same time certain that new idea should go to U.S.
for the final decision. According to the article published in Franchise International
website Graham (2006), Headquarters in Amsterdam were established to manage
growth and supervise operations of European franchisees. A manager responsible for
customer service and communication in Amsterdam Headquarters did not give much in-
formation about the functions and the purpose of these headquarters.
Discussing the decision making process at Subway, S2 said that every decision came
from higher level managers “They decide it, we do it”, he said. When S2 wanted to
make any changes on his own within the restaurant, using opening hours and furniture
as examples, he first needed approval from the regional managers in Gothenburg, he
said. He added that no changes except the opening hours have been made within the res-
taurant during the last six months. S1 confirmed the need for approval with higher level
managers and said that he could not make any changes without contacting the develop-
ment agent/regional manager. “If a change would be made without the development
agent’s knowledge there would be problems”, S1 said. RS agreed and said that every-
thing should go through him. If changes would be made without his approval, it could
lead to serious consequences such as termination of the franchising contract. When
asked if the local managers would like to make any changes within Subway or if they
want more power in general, S1 only mentioned marketing. He added that if every local
manager had too much power all Subway restaurants would look different. It is impor-
46
tant for Subway to maintain control so that every restaurant looks the same, he contin-
ued. S2 mentioned that he had enough power over marketing and that it was more or
less up to him when it came to dealing with it. S2 also mentioned that even though he
did not have as much power as he could have had, he still had the amount of power that
he wanted.
Talking about decisions made by the headquarters, S1 had experienced some unneces-
sary and sometimes “picky” changes. The light in the storage room was not placed ac-
cording to the rules, S1 said. S1 wanted to install extra light in the restaurant, but in-
stead the light had to be installed in the storage room due to Subway´s policies, accord-
ing to S1. S2 also had experienced some unwanted situations and gave an example
about local coupons (Subway-coupons that were only valid at the restaurants in Jonkop-
ing). A decision was made regarding distribution of local coupons, S2 was against the
idea but chose to accept it in order to avoid any collision with the other restaurant and to
not irritate or confuse the customers, S2 said.
According to S2 he did not need to ask the regional managers about, since it was not in-
side the restaurant. Installing the sunshade, S2 contacted a company on his own, sent
them the Subway-logo and told them what color and size he wanted. When the regional
manager then discovered the sunshade and the “outside serving area” they liked it and
said that it was a good initiative, S2 said. S1 added that when it comes to outside, he
could do whatever he want, but only if the material required for the innovation came
from Subway. In addition, sometimes different campaigns occurred with selected res-
taurants around Sweden. As an example, a campaign offering a foot long sandwich for
55 SEK was launched at selected restaurants. The regional managers asked S2 if he
wanted to participate in this, something that he chose to do, S2 said.
Regional managers/development agent’s role in innovation process is to: (1) check if
franchisees are doing well and are complying to the standards and rules stipulated in
operations manual, (2) mediate the ideas from franchisees to the headquarters in U.S.
and Amsterdam, (3) participate in phone conferences and provide information about
news and changes within Subway as well as listen to the franchisee ideas and some-
times carry out voting process, (4) participate in annual meetings where regional man-
47
ager provides information about future deals or future financial figures, (5) communi-
cate frequently with franchisees through e-mails.
As mentioned before, food and marketing committees exists within Subway. According
to RS, these types of committees exist in every country. Committees deal with questions
regarding the food and is responsible for everything that is served in the restaurants, RS
said. Within these committees, elected representatives from the franchisees, together
with national managers will meet and discuss future changes and innovations together
with general thoughts and ideas, RS continued. RS said that if committees decided on a
great idea, they would need to contact the U.S. to reach their approval. If they said
“Yes” then committees would have the power to implement the decision in all franchi-
sees. However, RS also mentioned that if committees were not sure about the success of
the idea, they would present the arguments against it to the headquarters and ask them
for a permission to vote. If U.S. said “Yes”, then committees would initiate the voting
process among all the franchisees in Sweden, which was carried out in annual meetings.
RS continued saying that every single idea which was discussed within these commit-
tees came from the franchisees themselves. Some of these ideas are then voted for at
the regional/national meetings with the franchisees, according to RS.
S1 mentioned that if a franchisee got a place in this committee, he/she would pay lower
advertising fee.
RS said that almost every decision should reach U.S. headquarters approval. All the
ideas discussed in the food and marketing committees would have to go to U.S. for ap-
proval. AM said that “If a franchisee in any country comes up with an innovative idea,
we will encourage them to contact HQ with the idea”
48
5 Analysis
In the analysis, the authors will combine the theory and findings in order to extract as
much information as possible from the findings.
5.1 Max
5.1.1 Communication
After interviewing the managers in Jonkoping, an overview of the current situation ap-
peared relatively clear. Vertical communication existed on a satisfying level for the lo-
cal management. More communication could exist, however the managers did not feel
any need for it. Like in any other managerial position, the managers were expected to
take own initiative and make own decisions when it came to day-to-day operation. This
is all part of being a manager. Obviously, higher level management received updates
and acted as support to the local management when it came to larger decisions or future
changes. Within Max organization, a Board of Operation existed in order to control the
day-to-day operation, plan for future events and being responsible for the restaurants
themselves.
Figure. 2 Max communication schedule
---- = Non-personal communication
<-> = Two-way communication
Figure 2 illustrates the impression the authors got after interviewing the local manage-
ment in Jonkoping regarding the communication within the organization. Addressing
the owners directly was possible for the local management, however this was not rec-
ommended and should only occur in “worst case scenarios”. Therefore, this part has
been left out of the table.
49
1. Headquarters
The headquarters located in Lulea controls the entire organization and every major deci-
sion will take place here. The headquarters is responsible for the final result and
progress within Max.
2. Board of operations
The Board of operations controls day-to-day activities and the restaurant themselves.
Any change or innovation that affects the restaurants and their daily operation will be
decided here, however final decision and approval will come from the headquarters. The
Board of operations consists of regional managers together with staff closely connected
to the headquarters, which makes it easy to communicate with both higher and lower le-
vels in the organization.
3. Regional managers
All the Max restaurants are divided into regions, according to their geographical loca-
tion. The restaurants in a specific region will then share a regional manager, who will
work as a mediator between the local restaurants and higher level management. Smaller
decisions, that the local manager feel insecure about can be decided directly by the re-
gional manager.
4. Local manager
The local manager is responsible for his/her restaurant and employees. The local man-
ger controls the daily operation in the restaurant and works “on the floor” together with
the rest of the employees. The local manager also reports all statistical data regarding
the restaurant revenue and result to higher level management, together with being the
one responsible for the implemented innovation.
5. Intranet forum
Max has a company intranet that works as base for internal communication, or a web
that connects every layer within Max. Here the employees, local- and regional manage-
ment together with the headquarters can discuss everything that is on their mind. The
intranet is the recommended way of communication when non-urgent situations occur.
Additionally, the local management can discuss problems and situations with other
50
managers and co-workers, together with searching for existing solutions for a specific
problem. In this way, problems can get solved faster and smoother than via the personal
communication.
General horizontal communication between the restaurants was also perceived as good,
however it existed more locally. Not only were the employees aware of the other restau-
rants within the city, the employees of these restaurants met during leisure time and par-
ticipated in activities provided by Max. Work exchange also occurred between the res-
taurants when additional workforce was needed at a specific restaurant. Regional and
national meetings were also held regularly with all the managers at Max, where the
managers discussed larger changes and problems, talked about the future and gave each
other tips and support.
5.1.2 Power
Rubin (1978) stated that in order to maintain control over the brand, it is in the best in-
terest for the franchisor to demand uniformity among the chain. After interviewing the
local managers at Max, they all presented the same mindset. Even though Max is not a
franchise, it was still important for them to maintain control over the brand and that they
supplied the same food and service in all their restaurants. Even though local manage-
ment was not allowed to make major innovations or changes on their own, bringing new
ideas and suggestions to the table was highly appreciated.
Having power and influence over new changes was something that Wilson (2009) said
should be earned and that it takes time and experience. This was also the case within
Max. An experienced manager would have more influence and respect when it came to
new ideas and changes, than a new manager. Currently, one of the managers in Jonkop-
ing asked the more experienced manager in a different restaurant located in Jonkoping
for advice before contacting higher level management. Therefore, the more experienced
manager would have more (indirect) influence when it comes to new innovations and
changes within Max, than the less experienced manager.
New ideas and innovative thinking was also highly recommended when it came to mar-
keting, since the local management was responsible for marketing. This was something
that Baucus et al. (1996) said often was seen within franchisees. However, no individual
51
marketing was made by one single restaurant. All the Max restaurants in Jonkoping
worked together in order to market their restaurants and the brand. In order to increase
the motivation for innovative thinking, Shane (1994) suggested the presence of rewards
and product champions. No reward was recognized within Max, however everyone was
encouraged to share their ideas with higher level management.
According to Miller (1983) several entrepreneurial strategies can beneficially be used
within a company in order to be more innovative, such as pro-activity, propensity to
take some risk and promoting innovation. No incentives such as reward or promotion
was recognized within Max, however every employee had the opportunity to share their
thoughts and ideas with their managers and co-workers.
5.1.3 Roger´s diffusion of Innovation, at Max
Figure 3. This table illustrates the impression the authors got after interviewing the lo-
cal management in Jonkoping regarding the process of new innovation within the or-
ganization. Not every decision regarding a new innovation goes trough the Board of
Operation. However, in this case, innovation in form of a SST works as an example and
will represent the process of new innovation. (If the innovation is marketing-related, the
board of operation will then be replaced with the marketing department within the com-
pany etc.)
52
1. Knowledge
Knowledge regarding SST´s was noticeable during the interviews with all the local
restaurant managers. Everyone knew about SSTs, however no-one of them had in-
vestigated it further. Individually they had more or less knowledge about SST and
managers who did not currently used SST´s in their restaurant were familiar with the
concept from other restaurants.
2. Persuasion
The process of the individual actively seeking for information was not shown by the
local management being interviewed. Talking to a local manager who was very in-
terested in technology and innovation in general, he revealed that he did not put any
effort or thinking into work-related innovations or new technology. Neither of the
managers at the Max restaurants had really strived for getting a new innovation in
form of a SST. The manager at the restaurant who currently uses a SST said that the
SST was there when he became manager, but admitted that it was a great asset for
the restaurant. The managers in the restaurants without a SST were more or less
neutral towards a future implementation and said that there was no existing need for
it.
The Board of Operation on the other hand, actively searched for more information
when it came to innovations and other things that will improve the operation. The
Board of Operation then sorted out all relevant information in order to see if there
existed any interesting innovation that could be implemented in the restaurants. The
Board of Operation will then inform the headquarters about the innovation and pos-
sibilities of implementation.
3. Decision
After receiving information from the Board of Operation, the headquarters will then
decide whether the innovation will be rejected or accepted.
4. Implementation
When it comes to implementation, local management will have greater responsibili-
ty in the innovation process. Since the innovations are implemented in the local res-
53
taurants, the local management will be the ones in charge of the innovation after the
implementation. However, sometimes unnecessary changes have been made which
only seemed to complicate things. These changes had been implemented in the res-
taurant, analyzed by the local management and then fixed, modified or removed if
the local management felt a strong need for it. The implementation worked as a try-
out stage, where theoretical ideas and innovations suggested by the Board of opera-
tion and headquarters were tested in the local restaurant. If regarded “unnecessary”
or “complicated”, these changes could be taken away and operation would then be
changed to the original routine. However, when it came to some changes the local
management and employees had to accept the situation and continue their day-to-
day work according to the new changes.
Even though Max strived to make all their restaurant consistent, with every menu
and restaurant looking as similar as possible, some differences occurred. When it
came to new innovations, the restaurants located in Stockholm would be the ones
implementing the innovation first. If shown successful, the innovation would then
be implemented in other restaurants located around Sweden.
5. Confirmation
After receiving feedback from the local management, the headquarters would make
the final decision regarding the implementation. Local management felt that they
had some power over the final decision. They were free to speak about their though-
ts and opinions regarding the implementation process (see step 4). However, the fi-
nal decision was the headquarters to make and whether they had taken all local
management´s thoughts and opinions in to consideration was not known by the local
management.
5.1.4 Examination of previous research
By comparing the findings of this research with findings of Lewin-Solomons (1999),
mostly similarities occur. However, some minor differences regarding the first step of
Roger´s Diffusion of Innovation (Knowledge) was discovered. According to Lewin-
Solomons (1999), headquarters will be the main actors during the first three stages in
54
Roger´s Diffusion of Innovation. However, overall knowledge about innovation existed
in all layers within Max and the main actor when it came to persuasion was the Board of
operation. Even though there existed a strong connection between headquarters and the
Board of operation, the Board of operation would still be seen as an independent part
within the organization. In the last three stages, (Decision, Implementation and Confir-
mation) the process corresponds with the research of Lewin-Solomons (1999). Decision
regarding implementation together with final confirmation of the innovation will be
made by the headquarters. In between, the innovation will be implemented at the local
restaurants where the local managers will be the ones responsible for the operation and
provide feedback to the higher level management and headquarters.
5.2 Subway
5.2.1 Communication
When asked, both franchisee managers expressed issues regarding the communication
within Subway. Issues such as problem with reaching higher level management and un-
supportive development agents. However both of the franchisee managers felt that they
had a satisfactory communication and support from higher level management.
One of the important tools for franchisees to be able to communicate with higher level
management was the existence of an advisory council, according to Dane (1992), Dan-
dridge (1994) and Lewin-Solomons (1999). In the U.S., the SFOAC (Subway Franchise
Owners Advisory Council) represented the franchisees, together with collecting and
summarizing feedback, thoughts and opinions from the franchisees. This made it easier
and more efficient for the franchisees to influence the headquarters. No equivalent or-
ganization or council existed in Sweden, according to the local management. However,
one of the franchisees pointed out that one of the Swedish franchisee managers would
be elected as a representative for the franchisees. The view from the regional manager
differed. He claimed that two committees existed where franchisees had high influence
over two specific topics, marketing and food. The aim was to have a large portion of
franchisees representatives in both committees. However, due to lack of interest, the
food committee did not have that many franchisee representatives.
Even though one franchisee was aware of an election procedure of a franchisee market-
ing representative, no knowledge regarding the product committee was recognized. This
55
clearly confirmed the statement by the regional manager, who said that there existed a
lack of interest among the franchisees regarding food-related issues. Thus, it was evi-
dent, that franchisees did not utilize representative bodies to their fullest potential, there-
fore hindering the effective communication with higher level management.
Local management perceived emails as a one of the best communicational tools. They
happened frequently and specially served as a great tool for managers that felt more
“shy” communicate ideas in person.
During phone conferences all managers of south of Sweden were participating in the
discussion. In this way, franchisees could communicate their ideas to regional manager
and also share opinions between other restaurant managers. One of the franchisees men-
tioned that the best tactic was to be aggressive in these meeting so that franchisee ideas
would be better heard by the regional manager.
These two ways of communication served as complements for franchisee managers.
Franchisees could choose a way which best suited their needs and personality. Addi-
tionally if some managers failed to communicate their ideas and opinions during these
meetings, they always could use email communication in order to compensate for un-
successful phone conference.
56
Figure 4. Subway communication schedule
This figure illustrates how local managers perceived the internal communication within
Subway.
When asking the local managers how their ideas regarding innovations would get trans-
ferred up to higher level management most efficiently, some differences were noticed.
Both managers agreed that the first step would be to talk to the regional manager, how-
ever the communication could then take two different ways. One of the local managers
said that it would be forwarded to the European headquarters in Holland while the other
local manager said that it would go to the company headquarter in the U.S. When con-
fronting the regional manager, he said that contacting Holland would be recommended
way. However, it was not that clear. It is clear that there existed an amount of confusion
how franchisees and regional managers perceive communication patterns in “Subway”.
This confusion is not only apparent among franchisees, but also higher level manage-
ment. This might be explained by the fact that most of the communication takes places
between franchisees and regional managers, therefore the broader picture of communi-
cations becomes somewhat scattered.
An interesting finding was observed when interviewing the regional manager. He men-
tioned that Amsterdam headquarters would be the recommended recipient of a franchi-
see idea. However, when he was talking about where ideas should be forwarded after
57
committees agree on them, RS said “U.S.” without any hesitation. This just further con-
firms the fact that communication between managers in Sweden and top managers in
U.S. is less clear and consistent. Horizontal communication exists less frequently than
vertical. Meetings with the restaurant managers in South of Sweden together with addi-
tional phone conferences were the only signs of horizontal communication that was de-
tected within the company. Local collaboration was recognized as almost non-existent.
One manager once felt “forced” to agree on a marketing campaign initiated by the other
restaurant and the higher level management, in order to minimize the risk for irritated
and confused customers.
5.2.2 Rogers Diffusion of Innovation applied on Subway
This figure illustrates the impressions and findings the authors got after interviewing
the franchisees in Jonkoping regarding the process of medium-sized innovations within
the organization. These findings were then analyzed by using Rogers Diffusion of Inno-
vations and visually illustrated as seen below.
Figure 5. Rogers Diffusion on Innovation, applied on Subway.
Initially, a major innovation such as a SST acted as example for an innovation. Howev-
er, the franchisees were not familiar with these types of innovations and the implemen-
tation process. Therefore, in order to maximize the relevant data provided by franchi-
sees, the authors chose to shift example to a medium-sized innovation, in this case the
58
introduction of a new sandwich. Since both franchisees more easily could share their
views and experience on this topic.
1. Knowledge
Knowledge regarding medium-sized innovations existed within the franchisees. All the
franchisees were aware of these types of innovations since it was a natural part of their
daily operation. According to the regional manager and the communication manager in
Amsterdam (RS and AM) most of the innovations and creativity came from franchisees.
Thus mostly franchisees are responsible in the knowledge stage.
2. Persuasion
Franchisees were not actively participating in the persuasion stage and they did not
search for more information regarding these innovations. However, there exist two
types of committees within Subway: Food- and marketing committee. These commit-
tees included higher level management as well as franchisee representatives, which con-
tinuously discusses changes and ideas regarding medium-sized innovations related to
food and marketing. These committees received suggestions and ideas from franchisees
and investigated further into these. If the committees, after gathering relevant informa-
tion and carrying out the discussion, believe that an innovation could benefit all franchi-
sees, the committees would then act as a mediator and contact the U.S. headquarters.
When it came to issues that the committee felt uncertain about, or when additional
thoughts and opinions were needed, a voting among all the franchisees in Sweden took
place. The franchisees would then vote on if they supported the innovation or not. The
result would then be sent to the U.S. headquarters.
3. Decision
After being discussed in one of the committees, or voted for among all the franchisees,
the idea regarding a new innovation would be sent to the U.S. headquarters which
would make the decision.
59
4. Implementation
Due to the importance of consistency within the franchise, the innovations that got ac-
cepted by the headquarters had to be implemented in all the franchisees. Thus, the pow-
er would lie in U.S. headquarters, because franchisees would not have any power to re-
ject the innovation. However, some decisions could be accepted as “optional”. In
those cases, franchisees could choose either to implement the decision or not. Thus, in
this case franchisees would exercise power over implementation
5. Confirmation
After the implementation, U.S. headquarters would be informed of the implementation
and then confirm the innovation.
5.2.3 Examination of previous research
The innovation process regarding medium-sized innovations corresponds with the inno-
vation process conducted by Lewin-Solomons (1999). Knowledge regarding the me-
dium-sized innovations existed within all the franchisees and ideas regarding medium-
sized innovations always originated from the franchisees. These ideas would then reach
the Persuasion-stage, where committees were conducted with franchisees together with
higher level management. Decision and Confirmation were both controlled by the head-
quarters, however franchisees had the power to vote for some innovations that the
committee felt insecure about. The implementation itself was conducted within the fran-
chisees and even optional in some cases. Therefore, a slight modification from the view
of Lewin-Solomons (1999) was recognized while investigating the Diffusion of Innova-
tion within the franchise. A larger amount of franchisee´s formal power existed within
this study than in the previous research. However other than that, the two studies cor-
responded.
5.2.4 The three Processes of Innovation within Subway
Within Subway, three different versions of the innovation (and change) process, depend-
ing on the size and coverage of the innovation, were discovered by the authors. In order
to present these findings in such a clear and structured way as possible, the authors
created the following figure (Figure 6) that visually shows how these processes were
perceived by the authors.
60
Figure 6. The Three Processes of Innovation
1. International and/or major innovations
When signing a franchisee contract, the local manager accepts some constraints set by
the franchisor. Together with constraints mention by Dandridge (1994), such as estab-
lishment design, territory of service and products of sale, implementing other types of
own innovation would also be considered breaking the regulations. Decisions regarding
major innovations such as SST´s would therefore be made in the company headquarters,
and later forwarded to the franchisees through the higher level management in Sweden.
Strict guidelines and rules are provided from the headquarters and needs to be followed
to its fullest. This is in order to maintain consistency within the chain, which is of high
value for the company, according to Rubin (1978). However, nothing is mentioned in
the guidelines regarding the exterior setting outside the restaurant. This made it possible
for one of the local managers to install an “outside serving area” together with a sun-
shade on his own initiative. This was allowed even though it would be considered as a
significant, visual change that violated the regulations if implemented inside in the res-
taurant.
2. National medium-sized innovations
As mentioned by Gallouj (1994), there exist different types of innovations, such as arc-
hitectural innovations and modifications. Additionally, Sundbo, Johnston and Mattson
61
(2010) said in their research that innovations made by frantrepreneurs mostly were in
terms of incremental innovations. Findings from Subway correspond with the results
from Sundbo, Johnston and Mattson (2010), where a modification in terms of the re-
moval of a sandwich took place.
By looking at Rogers Diffusion of Innovation, applied on Subway (Figure 6), it is fair to
say that the individual local manager has more or less no power over implementing new
medium-sized innovations on their own. However seen as a union, the franchisees had a
greater amount of power, especially within food and marketing, due to the franchisee
representatives in the committees. Baucus et al. (1996) confirmed that this was common
within franchising and said that franchisees often were encouraged to innovative think-
ing, specifically within marketing and product development.
3. Minor changes
When it came to minor local changes, such as opening hours, local managers felt that
they had a greater amount of power. However the change had to be clearly motivated
and regional managers had to be informed and approve the change.
5.2.5 Individual Entrepreneurship
Even though Dandridge (1998), Furquim De Azevedo, (2010), Sundbo, Johnston and
Mattsson (2010) compared franchisees as independent entrepreneurs, both the local
managers in Jonkoping emphasized the importance of control from the headquarters. In
order to protect the brand and to certify that all the franchisees within the chain supplied
the same product, control from the headquarters was necessary. However, analyzing the
answers given by the local managers, they perceived to have different degree of power
within the innovation process.
As mentioned, Baucus et al. (1996), said that franchisees are encouraged to innovative
thinking, which was confirmed by one of the franchisees, S2. After installing an “out-
side serving area” on his own initiative, he received positive feedback from the regional
manager. This would provide the franchisee with the encouragement to be more entre-
preneurial, proactive and independent in future situations as well. Also, he did not hesi-
tate to contact the headquarters in the U.S when something could not be solved by the
regional managers. Additionally, he felt more or less in control when it came to market-
ing and perceived that he had the amount of power that he needed.
62
In contrast, studies by Bradach, (1997), Kaufman and Dant (1996) saw franchisees as
“controlled self-employees”, risk averse and that they were entering into franchising in
order to buy a secure job. This reflected the impression the authors got regarding the
other franchisee, S1. No initiative regarding new innovations was found. Instead, the
franchisee relied more on the regional manager’s suggestions and support rather than on
his own judgment. “If an implementation would be made without the headquarters
knowledge there would be problems” he said.
Thus, findings suggested that even if the headquarters imposed a great amount of con-
trol over the franchisees. Local management had some power over implementing inno-
vations and changes. Especially when seen as a union, they had their highest amount of
power over issues regarding marketing and food. Local changes made on the initiative
of local management also existed. However, it depended to a great extent on the mindset
of the local franchisee managers and if they were entrepreneurial and motivated to use
the power or not.
5.2.6 Control over franchisees
Bradach (1997) in his study of 5 fast food chains found that checkups on franchisees
were usually carried out on average once per year. However, in the “Subway” case, the
check-ups are more frequent, usually carried out every month to see if the restaurant is
following the rules and standards. In addition, the Regional manager said that commu-
nication between development agents and franchisees are carried out more in formal fa-
shion. Thus, in Subway case, franchisor imposes a lot of control over franchisees even
though the number of franchisees is very high and according to Bradach (1997) and
Lewin-Solomons (1999) they should be less controlled.
63
6 Conclusion
Here the conclusion of the authors will be addressed.
This study confirms previous research which saw franchisees as being “controlled self-
employees with encouragement to be innovative”. Innovational thinking existed to some
extent within the franchisees. However, constraints from the company headquarters li-
mited the possibility for innovation regarding the restaurant and its assortment. A larger
amount of power, especially within marketing and food, was discovered when seeing
the franchisees as a union. In comparison, managers in company-owned outlets were
more independent than franchisees, when dealing with minor changes.
Therefore, the authors of this thesis state that the effect of the innovation process has a
positive relationship with the amount of power distributed to the local management. I.e.
in areas where the local management had a greater amount of formal power, local man-
agement also had a greater amount of affect in the innovation process. However, these
areas differ depending on the organizational structure. Franchisees showed the highest
amount of power within medium-sized innovations, while managers of company-owned
outlets showed the highest amount of power within minor innovations.
When it came to effectiveness of communication, the managers in all the franchise and
company-owned outlets perceived being satisfied with the existing communication to-
wards regional management. However the authors of this thesis discovered that the effi-
ciency within the communication between local management and top level management
differed. Managers in company-owned outlets had a closer connection towards the top
level management, than the franchisees. Additionally, the authors discovered that com-
munication and collaboration that existed between the company-owned outlets were
lacking between the franchisees. Instead, franchisees acted individually and saw each
other as competitors. This led to unnecessary communication with higher level man-
agement taking place, with the consequence of higher level management being unable
to focus on the more important issues. By implementing more horizontal communica-
tion and collaboration between the franchisees, it is in the authors beliefs that the effec-
tiveness of the communication would be largely increased.
64
Therefore, the authors of this thesis state that even though the communication within
the two fast food restaurant chains were perceived as satisfying and overall efficient
among the local management, there exist an opportunity for improvements. Especially
within the franchise system where an increased local communication and collaboration
would lead to more efficient communication throughout the entire organization.
65
7 Discussion
Here the authors will discuss the research and topic further and additionally suggests
further research.
This thesis brings forward the role of the local management when it comes to the inno-
vation process. Previous research mainly focused on the franchise system, while this
thesis mainly focused on the role of the local management, including both franchisees
and company-owned outlets. From the findings in this thesis the authors believe that the
previous research on franchise organization can be applied to company-owned outlets as
well. Even though Max is fully company owned it shared many similarities with a fran-
chise system. Communication within the franchise lacked the efficiency that was
present within the company-owned organization. Although franchisees had a greater
amount of clear power regarding national, medium-sized innovations (especially within
marketing and food).
Possibly this could be affected by the size of the companies. Of course Max which only
operates in Sweden does not have the same issues regarding different cultures and coun-
tries that Subway has to deal with. Hence the communication and organizational struc-
ture in Subway should look more complicated than in Max. However the authors of this
thesis do not believe that Subway has reached their potential when it comes to commu-
nication.
By improve the horizontal communication, authors believe that the efficiency of the en-
tire internal communication within Subway will be improved.
By the authors own experience, efficient internal communication is one of the corner
stones of a successful operation. Regardless if it is a national fast food franchise or a ba-
chelor thesis within Business administration, efficient communication is something that
is just as important as obvious.
7.1 Suggestions for further research
As this thesis is conducted in Jonkoping, Sweden it includes two Subway-restaurants
and three Max-restaurants. Therefore it would be interesting to expand the research to
include a larger sample of restaurants. Additionally, Max is currently launching a fran-
66
chise-program in Norway. When this program has gained enough experience, it would
be interesting to replicate this study by using both company-owned outlets and franchi-
sees of Max.
Furthermore, research regarding the role of local management within a franchise could
be extended. The authors found a lot of research regarding franchise organizations;
however in a larger organization it can be easy to forget about the local aspect. It is the
local management and personnel who represents the company and deals with the ma-
jority of customer contacts. Hence it is the authors’ beliefs that the local management
would play a major role when it comes to innovation and entrepreneurial thinking.
67
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Appendix
71
Appendix 1
Questions for Max
General, operational questions
How long have you been working as manager at this restaurant/company?
What is your strength/weakness, in comparison with the other fast-food restaurants in Jonkoping?
How would you describe your relationship with the other Max restaurant in Jonkoping? (Competitors,
“teammate”, “just another restaurant”?)
Innovation
Where does the creative process usually come from? (From restaurant or from the headquarters?)
Do you have to call the managers or have their consent when you want to change even a slightest thing or
you have some independence over certain things?
Even if you know that you need headquarters consent, do you still feel that you could implement the in-
novation by yourself without angering the headquarters?
Has there been any innovation, changes recently in Jonkoping or Swedish Max in general
(within the last 6 months)? If so what and who made the decision regarding the changes?
Does Subway provide some rewards/opportunities to motivate you in order to come up with ideas for im-
provements? (ex. provide seminars, meetings, conferences, workshops, bonuses etc?)
Is there anything that you want to change within the restaurant if you had the power?
SSTs
Have you ever thought of implementing a SST, *explain SST*?
Would you regard an SST as a major change?
When making major changes within the restaurants, such as implementing SST´s, expanding the restau-
rants, new food etc. How does the decision making process normally looks/would look like?
Perceived power of restaurant managers
Have you ever thought that an un-necessary/negative change has been made within the restaurant, as a
demand from higher ground?
How did the process turn out? i.e what happend with the change, was it fully implemented?
Would you like to have more power over making decisions?
Do you think that will benefit the whole system or maybe only the Swedish franchise system?
How often are you in contact with your manager? (e-mail, phone-contact and personal contact)
Do you feel that your thoughts, opinions and ideas are taken seriously, when contacting the higher man-
agers?
Appendix
72
Do you feel that you get the support you want/need from the higher managers?
When it comes to buying equipment. Do you buy it through Max or own suppliers?
How exactly does the franchise concept work? Detailed with Max!
Are there any regional/national meetings (regularly), to discuss problems, new innovations etc?
Appendix
73
Appendix 2
Frågor till Max
Generella, verksamhetsfrågor
Hur länge har du jobbat som chef på den här restaurangen/företaget?
Vad anser du vara era styrkor/svagheter, in jämförelse med andra dem snabbmatsrestaurangerna i Jönkö-
ping?
Hur skulle du beskriva er relation med de andra Max restaurangerna i Jönköping? (Konkurrent, lagkam-
rat, bara en helt annan restaurang?)
Innovation
Var kommer vanligtvis den kreativa processen ifrån? (Från restaurangerna eller mer från huvudkontoret?)
Behöver du ringa högre chefer eller ha deras tillstånd när du vill göra även de minsta ändringarna eller har
du någon självständighet över vissa saker?
Även om du behöver huvudkontorets tillstånd, känner du att du fortfarande kan implementera innovatio-
nen utan att uppröra huvudkontoret?
Har det varit någon innovation eller generell ändring på senaste tiden i Jönköping eller Max i Sverige
(inom de senaste 6 månaderna)? Om så är fallet, vem/vilka gjorde beslutet om ändringen?
Erbjuder Max några belöningar eller möjligheter för att motivera er att komma på idéer för förbättringar?
(Ex. Erbjuder seminarier, möten, konferenser, verkstäder, bonusar etc.)
Är det något inom restaurangen som du skulle vilja ändra om du hade möjligheten?
SSTs
Har du någonsin tänkt på att implementera en SST, *förklara SST*?
Skulle du beskriva SST som en större ändring?
När beslut om större ändringar inom restaurangen, så som implementera SST’s, utöka restaurangens ut-
bud etc. Hur ser vanligtvis den processen ut/hur skulle den se ut?
Uppfattad makt av restaurang cheferna
Har du någonsin känt att en onödig/negativ ändring har gjorts inom restaurangen på order uppifrån?
Hur såg den processen ut? Vad hände med ändringen, blev den implementerad till fullo?
Skulle du vilja ha mer makt över beslutsprocessen?
Tror du att det skulle vara till fördel för hela Max i Sverige?
Hur ofta är du i kontakt med din chef? (e-mejl, telefonkontakt och personlig kontakt)
Känner du att dina tankar och idéer tas på allvar när du kontaktar högre uppsatta chefer?
Känner du att du får den support du vill ha/behöver från högre uppsatta chefer?
När det kommer till att köpa in utrustning/varor. Måste du köpa det genom Max eller egna leverantörer?
Hur funkar det inom Max?
Är det några regionala/nationella möten (återkommande), för att diskutera problem, nya innovation etc?
Appendix
74
Appendix 3
Questions for Subway
General, operational questions
How long have you been working as manager at this restaurant/company?
What is your strength/weakness, in comparison with the other fast-food restaurants in Jonkoping?
How would you describe your relationship with the other Subway restaurant in Jonkoping? (Competitors,
“teammate”, “just another restaurant”?)
Innovation
Where does the creative process usually come from? (From franchisees or more from the headquarters?)
Do you have to call the managers or have their consent when you want to change even a slightest thing or
you have some independence over certain things?
Even if you know that you need headquarters consent, do you still feel that you could implement the in-
novation by yourself without angering the headquarters?
Has there been any innovation, changes recently in Jonkoping or Swedish subways in general
(within the last 6 months)? If so what and who made the decision regarding the changes?
Does Subway provide some rewards/opportunities to motivate you in order to come up with ideas for im-
provements? (ex. provide seminars, meetings, conferences, workshops, bonuses etc?)
Is there anything that you want to change within the restaurant if you had the power?
SSTs
Have you ever thought of implementing a SST, *explain SST*?
Would you regard an SST as a major change?
When making major changes within the restaurants, such as implementing SST´s, expanding the restau-
rants, new subs etc. How does the decision making process normally looks/would look like?
Perceived power of franchisee owners
Have you ever thought that an un-necessary/negative change has been made within the restaurant, as a
demand from higher ground?
How did the process turn out? i.e what happend with the change, was it fully implemented?
Would you like to have more power over making decisions?
Do you think that will benefit the whole system or maybe only the Swedish franchise system?
How often are you in contact with your manager? ( email, phone-contact and personal contact)
Do you feel that your thoughts, opinions and ideas are taken seriously, when contacting the higher man-
agers?
Do you feel that you get the support you want/need from the higher managers?
Do you know about the existence of the advisory council in Subway.
Appendix
75
Do you think that this council is useful and does it help franchisees in Jonkoping or Sweden? Does it help
for your ideas to be heard?
When it comes to buying equipment. Do you buy it through Subway or own suppliers?
How exactly does the franchise concept work? Detailed with subway!
Are there any regional/national meetings (regularly), to discuss problems, new innovations etc?
Appendix
76
Appendix 4
Subway Ordering
1. Sub or Sallad
Even though Subway are known for their sandwiches , all their sandwiches can also be
made as a salad.
2. Bread
Subway in Sweden offers five different types of bread; Wheat, Sesame, Parmesan &
Oregano, Wholegrain and Honey oat.
3. Size
All their sandwiches can be ordered in two different sizes, 15 centimeter or 30 centime-
ter (footlong).
4. Extra
The opportunity to order extra chicken, extra cheese, bacon etc. And also decide if the
sandwich (or salad) should be warm or cold.
5. Vegetables
Decide what vegetables to put on the sandwich (or salad); lettuce, tomatoes, cucumbers,
pickles, peppers, olives, red onions and/or jalapeños.
6. Dressing
Subway in Sweden offers 10 different dressings that can be put on the sandwich (or sal-
ad). Together with salt and/or pepper.
7. Meal
If cookies, apples or chips should be added to the sandwich (or salad) together with a
drink.
(Subway.se, 27 mars 13.45)
doc_692726467.pdf
Innovation is an important aspect of business today. It is important for companies to be innovative in order to stay competitive with their competitors. During the last couple of decades, technology has become more and more common both in our daily life, as well as in businesses.
Innovation within Fast Food
Restaurants
-The role of the local restaurant management
Bachelor’s Thesis within Business Administration
Authors: Henrik Antonsson
Lukas Engström
Vytautas Verbus
Tutor: Olga Sasinovskaya
Jonkoping [May 2011]
i
Authors’ Acknowledgements
The authors would like to thank their tutor Olga Sasinovskaya for valuable support
and feedback.
Also, the authors would like to thank all participants in this thesis for their coopera-
tion.
Finally, the authors would like to thank everyone who has been a part of this thesis,
who provided the authors with support, feedback and encouragement.
ii
Bachelor’s Thesis in Business Administration
Title: [Innovation in Fast Food Restaurants – The role of the local restau-
rant management]
Authors: Henrik Antonsson
Lukas Engström
Vytautas Verbus
Tutor: Olga Sasinovskaya
Date: [2011-05-23]
Subject terms: Innovation, power, communication, franchise, company-owned, fast food
restaurant
Abstract
Background: Innovation is an important aspect of business today. It is important for
companies to be innovative in order to stay competitive with their competitors. Dur-
ing the last couple of decades, technology has become more and more common both
in our daily life, as well as in businesses. This has lead to an increase in technology
implementation, especially within the service industry, where customers now can use
self-service technologies in order to receive the service on their own. However, a
lack of self-service technologies was discovered within the fast food industry. Since
these types of innovations increased the service efficiency and decreased the waiting-
time for customers, the authors believed that this would be very interesting for local
managers within the fast food industry. Therefore, the authors began to investigate
how much power local management has over these types of new innovations.
Purpose: The purpose of this thesis is to explore how local management affects the
innovation process, within fast food restaurant chains.
Method: By conducting a cross-case study with the two fast food companies Sub-
way and Max, the authors interviewed local fast food managers in order to explore
the effect local management have on the innovation process. These two cases were
selected since Subway fully consists of franchisees, while Max is almost completely
company owned. Therefore, the two most common organizational structures within
the fast food industry are included which will provide a more fair view of the indus-
try.
iii
Conclusion: The effect of the innovation process has a positive relationship with the
amount of power distributed to the local management. However, these areas differ
depending on the organizational structure, with franchisees achieving their highest
amount of power within medium-sized innovations and managers in company-owned
outlets maintain their highest amount of power within minor innovations. Even
though the overall communication was perceived as satisfying and efficient, large
opportunities for improvements occur. By implementing more horizontal communi-
cation within the local management, it is in the belief of the authors that the entire in-
ternal communication will benefit. Especially this would benefit the franchise system
where an increased local communication and collaboration would lead to more effi-
cient communication throughout the entire organization.
iv
Definitions
SST: Self-Service Technology. Technological products
that enable customers to produce their own ser-
vice (Natarajan, 2010).
Innovation: Schumpeter (1934) defined innovation as the act of in-
fusing a new component or a mix of components into
production.
Fast food restaurants:The authors own definition: Restaurants that pro-
duces food fast. Customers do normally not spend
long time in the restaurant. Examples of these
places are Max, McDonalds, Burger King and
Subway.
v
Table of Contents
1 Introduction/Background ........................................................ 8
1.1 Problem Statement ....................................................................... 9
1.1.1 Franchisees ........................................................................ 9
1.1.2 Company owned outlets ..................................................... 9
1.2 Purpose ....................................................................................... 10
1.3 Research questions..................................................................... 10
1.4 Delimitations................................................................................ 10
2 Theoretical Framework ......................................................... 11
2.1 Self-Service Technologies ........................................................... 11
2.1.1 Franchising ....................................................................... 12
2.1.2 Innovation ......................................................................... 12
2.1.3 Innovation in a franchise setting ........................................ 13
2.1.4 Franchisee vs. Company-owned outlets ........................... 14
2.1.5 Communication ................................................................. 16
2.1.6 Experience of a franchisee ............................................... 16
2.2 Summary of the findings .............................................................. 17
2.3 Concept Development ................................................................. 17
2.3.1 Roger’s diffusion of innovation .......................................... 17
3 Method ..................................................................................... 20
3.1 Arguments for selecting a case study approach .......................... 20
3.2 Pilot study ................................................................................... 20
3.3 Case selection............................................................................. 21
3.3.1 Location of Research ........................................................ 21
3.3.1.1 Subway ......................................................................................................... 21
3.3.1.2 Max ............................................................................................................... 23
3.3.2 Selection of study units ..................................................... 23
3.4 Data Collection ............................................................................ 24
3.4.1 Language of the interview ................................................. 26
3.4.2 Interview Techniques ........................................................ 27
3.4.3 Interview guide.................................................................. 29
3.5 Data analysis............................................................................... 30
3.5.1 Inductive vs. Deductive approach ..................................... 30
3.5.2 Cross case analysis .......................................................... 31
3.6 Trustworthiness ........................................................................... 31
3.6.1 Credibility .......................................................................... 31
3.6.2 Transferability ................................................................... 33
3.6.3 Dependability .................................................................... 33
3.6.4 Confirmability .................................................................... 34
3.7 Interpretation of the data ............................................................. 34
4 Results .................................................................................... 36
4.1 Current relationship with SST’s ................................................... 36
4.1.1 Max ................................................................................... 36
4.1.2 Subway ............................................................................. 37
4.2 Comparison with competitors ...................................................... 37
4.2.1 Max ................................................................................... 37
4.2.2 Subway ............................................................................. 38
vi
4.3 Communication ........................................................................... 38
4.3.1 Max ................................................................................... 38
4.3.2 Subway ............................................................................. 40
4.4 Innovation, changes and power distribution ................................. 42
4.4.1 Max ................................................................................... 42
4.4.2 Subway ............................................................................. 44
5 Analysis ................................................................................... 48
5.1 Max ............................................................................................. 48
5.1.1 Communication ................................................................. 48
5.1.2 Power ............................................................................... 50
5.1.3 Roger´s diffusion of Innovation, at Max ............................. 51
5.1.4 Examination of previous research ..................................... 53
5.2 Subway ....................................................................................... 54
5.2.1 Communication ................................................................. 54
5.2.2 Rogers Diffusion of Innovation applied on Subway ........... 57
5.2.3 Examination of previous research ..................................... 59
5.2.4 The three Processes of Innovation within Subway ............ 59
5.2.5 Individual Entrepreneurship .............................................. 61
5.2.6 Control over franchisees ................................................... 62
6 Conclusion .............................................................................. 63
7 Discussion .............................................................................. 65
7.1 Suggestions for further research ................................................. 65
References .................................................................................... 67
vii
Figures
Figure 1 Five stages in the Decision Innovation Process…………………………...18
Figure 2 ……………………………………………………………………………..49
Figure 3 ……………………………………………………………………………..52
Figure 4 ……………………………………………………………………………..57
Figure 5 ……………………………………………………………………………..58
Figure 6 ……………………………………………………………………………..61
Tables
Table 1. Factors influencing innovation in fast food franchises ……………………17
Table 2. Overview over the restaurants, interviewees, place, time, length and lan-
guage of interview ………………………………………………………………25-26
Appendicies
Appendix 1 Questions for Max
Appendix 2 Frågor till Max
Appendix 3 Questions for Subway
Appendix 4 Subway ordering
8
1 Introduction/Background
Here the authors will introduce the reader to the topic and discuss the background and
problem statement. Further, the purpose and research questions will be presented.
In the past few decades, companies in the service industry have changed the way they
provide service to their customers. Before service was understood as customer’s person-
al and close interaction with an employee. Today, technology is changing the way how
services are developed and delivered. Some industries make use of different types of in-
novation that is lacking in other industries, like self-service technologies (SST’s). SST’s
were found to be common in the banking-, traveling- and retailing industry. However,
the authors found that in the fast food industry there was a lack of these technologies.
Judging by examples from other companies, which had implemented this technology,
there existed a huge opportunity for these technologies to be implemented with great
benefit for both companies and customers.
From the literature review it was realized that there existed a scarcity of research about
the role of local management in the innovation process within fast food restaurant
chains. After some research of relevant literature and a pilot study with several local
restaurants and cafés, the focus shifted from exploring possibilities of SST in the service
industry to the innovation process itself. Even though the focus shifted from SST-
possibilities to the innovation process, SST´s will still have an important role in this the-
sis. SST´s will work as an example of a major innovation in order to make it easier for
the interviewees to imagine the process that will take place. Additionally, a company
that already has implemented these types of technologies reports significant increase in
profit. Therefore, by using SST as an example of a major innovation the authors believe
that maximum interest from the participants will be obtained.
The pilot study also showed that a SST implementation would be treated in a similar
manner as other radical innovations requiring considerable amount of capital expendi-
ture. Therefore, the authors believed that SST served as a good example of a major in-
novation. The focus was then narrowed down to only cover fast food chains, since it be-
came relatively clear during the pilot study that this was the branch within the food ser-
vice industry which had the largest interest in implementing new technologies and
SST´s. Thus, the aim is to investigate the role of local management in the innovation
process within fast food restaurant chains.
9
1.1 Problem Statement
1.1.1 Franchisees
A majority of fast food chains uses two types of establishments: franchisees and com-
pany owned outlets (Bradach, 1997). The proportion of these two establishments in a
fast food chain will have an impact on allocation of authority, power (Furquim De Aze-
vedo, 2010), innovation process (Lewin-Solomons, 1999) and communication. Dane
(1992), Dandridge and Falbe (1994) and Lewin-Solomons (1999) emphasize the impor-
tance of advisory councils as tools to communicate between franchisees and the franchi-
sor. This benefits both sides, since franchisors largely depend on franchisees feedback
and creativity as well as franchisees easily can share their thoughts and opinions. After
a thorough research of the relevant literature, the authors learned that a number of re-
searchers identified the scarcity of research about the role of the franchisee in the inno-
vation process (Dandridge, 1998; Sundbo, 2010). Dandridge (1998) looked at how or-
ganizational variables in franchising such as size, age and growth affected the support of
franchisor for franchisee innovation. Another study, conducted by Lewin-Solomons
(1999), explored how much formal and informal power each player in a fast food fran-
chise system has.
Existing research on innovation and entrepreneurship in franchising has concentrated on
franchisees, mostly due to the fact that franchisees are perceived as entrepreneurs (Dan-
dridge, 1998), even though entrepreneurship by franchisees is constrained by standards
and policies imposed by a franchisor (Bradach, 1997).
These findings set the base for one of the objectives of this thesis, which was to explore
the effect franchisees have in the innovation process within a fast food restaurant chain.
This is obtained by looking at franchisee power and effectiveness of communication be-
tween franchisee and franchisor.
1.1.2 Company owned outlets
Research identified that managers in company-owned stores are less independent than
franchisee managers and less concerned with sales or profit outcomes (Boyle, 1994;
Lewin-Solomons, 1999). This is due to the fact that company managers are more con-
cerned about stable job and promotions. Thus it would be expected from the mangers to
10
obey the authority rather than being independent and creative (Lewin-Solomons, 1999).
In addition Williams (1985) argues that managers in company-owned stores tend to
shirk and deliver worse results than franchisees because a part of their salary is fixed
and independent of the unit performance. This leads to a lack of motivation and does
not provide an incentive to increase performance. Therefore, company headquarters that
hires managers would be willing to impose more control on them than on independent
franchisees. However, in most research papers, companies being analyzed had either a
lot of franchisees and few company-owned stores, or somewhat similar proportion of
both establishments. Therefore, it would be interesting to see if the same arguments
hold in a company, where every establishment is company-owned.
Thus, the other objective of this research paper was to explore the effect local manage-
ment has in the innovation process within a fast food chain. This is obtained by looking
at power and effectiveness of communication between company-owned outlets and
headquarters.
1.2 Purpose
The purpose of this thesis is to explore how the local management affects the innovation
process, within fast food restaurant chains.
1.3 Research questions
How does power distribution affect the role of the local management in the innovation
process within fast food restaurant chains?
How effective is the internal communication within fast food restaurant chains?
1.4 Delimitations
The main focus in this thesis was to explore the effect of local management within the
innovation process. Since the innovation process is also affected by other participants,
such as headquarter and higher level managers, it was necessary to include these layers
in this study. However, it was not the intention of the authors of this thesis to investigate
these additional layers in-depth. Additionally, the intention of this thesis was not to
compare two selected cases, but rather treat them as separate study units, link them to
the theoretical constructs and see if they comply or contradict them.
11
2 Theoretical Framework
Here the authors will present and discuss relevant theories that have guided the authors
throughout this research.
2.1 Self-Service Technologies
In 1978, Chase (1978) discussed that service companies should try to make their opera-
tions as efficient as possible. This can be made by shifting operations that require cus-
tomer-employee interaction to the back-office if the customer-employee interaction is
not critical to the company.
With the help of technology, customers basically replace employees and produce ser-
vices themselves (Natarajan, 2010). By using self-service delivery options, the company
which implements the technology will obtain benefits such as increased productivity
and decreased costs (Lovelock, C.H. and R.F. Young, 1979) (Sathye, 1999) (Kelley,
1994). For example, IBM saved US $2 billion when they shifted telephone call service
to online service provision (Burrows 2001).
Holman (2010) pointed out some hinders which made fast food restaurants somewhat
more reluctant to use these types of technologies. One hinder he pointed out was the
fact that most of the fast food restaurants were organized as franchisees. Additionally,
current service philosophies, comfort levels with technology and financial resources of
franchisees were not beneficial for implementation of SST´s (Holman, 2010)
However, some restaurants have already implemented some types of SST, mainly touch
screen ordering systems, and enjoyed financial benefits. For example, Subway has im-
plemented a touch-screen ordering kiosk in one of their franchisee´s drive-thru´s. This
lead to an increased profit with up to US $750 per week, including larger orders and de-
creased labor costs (Nextep systems, 2006).
So, given existing research and successful practical examples from business life, it is
quite surprising that most of the fast food service companies are hesitating to implement
SST´s
12
2.1.1 Franchising
Most of the well established fast food chains are franchises with a large international
presence such as McDonald’s, Subway, KFC, Burger King, Pizza Hut and more. In a
franchise agreement, the parent company, the franchisor gives the right to the franchi-
see, an independent entrepreneur, to market and sell branded products and services of a
franchisor (Furquim De Azevedo, 2010). In return, the franchisee pays fees such as
royalties, advertising fees, franchise fee and a development fee (if a franchisee decides
to open an additional unit) (Mihoubi, 2011).
The franchisor also puts constrains on the franchisee in terms of establishment design,
location of establishment and the products offered. The franchisee normally pays a fixed
fee and a royalty depending on performance. Franchisor supports product development,
trains management, and supports national promotional efforts (Dandridge, 1994).
According to Rubin (1978), it is in the best interest of the franchisor to demand unifor-
mity within the company in order to safeguard the brand. Rubin (1978) continued by
saying that one of the main problems in a franchise system was when a franchisee de-
cided to provide lower quality on a product or service than required by the franchisor. In
other words: misuse the brand.
2.1.2 Innovation
Schumpeter (1934) defined innovation as the act of infusing a new component or a mix
of components into production.
An innovation can be either radical or incremental. According to Sundbo, (2010) in-
cremental innovation is adaptation of existing products or a new way of delivering
products. These types of innovations are the most common ones in franchisees. Since
franchisees as well as company-owned outlets have specific instructions from the head-
quarters on how they should conduct business, which constrains them to implement rad-
ical innovations on their own. Deviations from this instruction can have unpleasing con-
sequences, for example, termination of a franchisee contract.
Gallouj (1994) mentioned different types of innovations: (1) Service product: which re-
sults in innovation of new element, (2) Architectural: Same elements mixed in another
way, (3) Modification: Some elements are adjusted, (4) Ad hoc: Results in a develop-
ment of a new solution.
13
In their study about Swedish and Australian frantrepreneurs (a person/franchisee who
uses the franchise concept to innovate and adapt service to foreign market) Sundbo,
Johnston and Mattsson (2010) found that frantrepreneurs were driven by a number of
factors, forcing them to change the standard offering. These were: culture, industry de-
velopment between countries and opposition from staff. However, innovation made by
franterpreneurs generally had an incremental nature rather than radical.
2.1.3 Innovation in a franchise setting
Entrepreneurship within any organization depends a lot on the firm’s ability to provide
the conditions for it, especially when it comes to creating enough slack or potential
space in the system (Kao, 1989; Nohria and Gulati 1996). These factors are relevant for
the franchise system, because the amount of entrepreneurial aspects such as pro-
activeness and pursuit of aspirations will greatly depend on the organizational context
that a franchise system provides (Hamel and Prahalad 1996).
There exist numbers of entrepreneurial strategies that a company can pursue, such as
pro-activity, propensity to take some risk and promoting innovation (Miller, 1983).
Promotion of innovation can take many forms. The most common ones, also discussed
in entrepreneurship and innovation literature, are rewards and the presence of product
champions aimed to support innovation and entrepreneurial activity (Shane 1994).
It is common to see the franchisor as an entrepreneur; however the same cannot be said
about the entrepreneurial activity of a franchisee. Franchisor is keener to select manag-
ers rather than employees for running a franchisee, in order to increase the protection
for an unauthorized change (Dandridge, 1998). Thus it is important to recognize the
possible benefits that franchisee managers can provide to the whole system if they are
being encouraged to be innovative.
Dandridge (1998) found that size and relative growth of the franchise system are posi-
tively related to franchisor support for franchisee innovation. Additionally, Dandridge
(1998) found three main ways that franchisor managers use to encourage entrepreneuri-
al activity in franchisees. These were: “the use of franchise council, the recognition of
new ideas at the annual meeting of the franchise system, and the presence at franchisor
14
headquarter of a champion for innovation at the franchisor headquarters” (Dandridge,
1998, p133).
There is a belief that franchisees can be regarded as “controlled self-employed”, where
entrepreneurship is constrained by standards and policies imposed by the franchisor
(Bradach, 1997). Kaufmann and Dant (1996) looked at franchisees as being risk averse,
lacking initiative and that they enter into franchising in order to buy a secure job. How-
ever, other research recognized that franchisees were often being encouraged to be in-
novative, especially when it came to local marketing and product development (Baucus
et al. 1996). A study of McDonald’s franchisees conducted by Weaven (2004) found
that single-unit franchisees did not see innovation as an important thing. Instead, they
stressed more financial security and control over marketing
2.1.4 Franchisee vs. Company-owned outlets
As mentioned by Lewin-Solomons (1999) both franchisees and company-owned outlets
could be present in a company simultaneously. Shelton (1967) showed that fast food
franchisees are more efficient than company-owned outlets. This is due to the fact that
franchisees were more concerned about resources, costs and conditions of the local
market. Oxenfeldt and Kelly (1968) added that franchising is a faster way to grow and
gives access to financial as well as human resources and Minkler (1990) added that
franchising also provides an understanding of local markets.
However, Oxenfeldt and Kelly (1968) said that franchise systems tend to rely more on
company-ownership instead of franchising when maturity is reached. This occurs for
three main reasons: franchisor tries to increase its profit by taking control over the most
profitable units, franchisor acquires local knowledge of site when acquiring outlets and
franchisor increases the managerial skills of the company.
In general, company ownership gives more operating credibility to the franchise organi-
zation, whereas franchisees are more a source of creativity (Dant, 1992). The study of
franchising in France by Cliquet (2011) found a tendency among companies to group
franchisees together in order to smooth the progress of innovation and new product de-
velopment. They also found that franchisees experienced demotivation and anxiety if
the number of company-owned stores were too high.
15
A study conducted by Lewin-Solomons (1999) on innovation and authority in franchise
systems investigated five major fast food chains: Burger King, Pizza Hut, Denny’s,
Subway and KFC. They found that the innovation process in a fast food chain differs
depending on the proportion of franchisees compared to company-owned stores. If the
proportion of franchisees is large, like in Burger King, the innovation and creativity
usually comes from the franchisees. In chains like Denny´s and Pizza Hut, where there
are more company-owned outlets than franchisees, the innovation usually comes from
the company headquarters and is often implemented in company-owned outlets first.
In these cases, where there exist a large number of company-owned outlets, franchisees
are generally more confident about the company´s decisions. They believe that they will
not implement something that will be unprofitable, since the losses will be significant
for the company. Company headquarters are also mostly responsible for evaluating the
idea and deciding whether to implement it or not.
An additional finding by Lewin-Solomons (1999) was that most of the product testing
takes place in franchisees, especially within Burger King and Subway where the propor-
tion of franchisees is high. The companies then also depend on the constructive feed-
back of franchisees in order to solve any problem.
Difference between “formal” and “real” power has been recognized by several re-
searchers. Aghion and Tirole (1997, p. 33) explains the difference as formal power be-
ing “the right to decide” while real power being “the effective control over decisions.”
Furquim De Azevedo (2010) argued that the formal power of the franchisor will in-
crease if the number of company-owned outlets increases. Moreover, with the increase
of company-owned outlets the real power of a franchisor also increases. Because with
the help of the information gathered from its own units, the franchisor collects valuable
knowledge about franchisees environment.
However, Furquim De Azevedo (2010) also argued that if franchisor maintains too
much authority, this would impede franchisee chances to utilize specific local know-
ledge. Findings of their study suggest that the higher the brand value the lower the allo-
cation of authority to franchisees.
16
2.1.5 Communication
Bradach (1997) found that communication between the higher level and local manage-
ment in company-owned outlets was strictly formal. It was typical to use management
information systems for measuring performance of the company. Field audits were tak-
ing place on average once per month, together with frequent secret visits by company
managers in order to assess dining experience from customers point of view (Bradach,
1997).
Bradach (1997), continued to say that the most important aspects for higher level man-
agement in order to communicate with franchisee were communication-, negotiation-
and listening skills. Field audits and secret visits for evaluating performance were car-
ried out less frequently in franchisees than in company-owned outlets. This implies that
franchisees have greater amount of independence which can positively affect their posi-
tion in the innovation process.
From the franchisee perspective, one of the most important tools for communication
was the franchisee advisory councils. The advisory council served as a valuable instru-
ment for the franchisees to communicate with their superiors. Dandridge (1994) defined
the advisory council as an elected or selected small group of franchisees who meet with
company headquarters representative to give advice on matter that are important to all
franchisees. Research by Dane (1992) concluded that both autonomy and high depen-
dence on franchisor would increase franchisee success. Lewin-Solomons (1999) added
that advisory councils were very important for franchisees, because headquarters de-
pend largely on franchisee input when it came to decision-making.
2.1.6 Experience of a franchisee
Managerial expertise is an organizational specific asset that accumulates in time (Wil-
liamson, 1985). The study conducted by Dandridge (1998) found that company size had
positive impact on franchisor support on franchisee innovation. The degree of innova-
tion by franchisees was also found to be positively affected by the amount of time the
franchisee is in the system (Wilson, 2009). Study by Lewin-Solomons (1999) found that
franchisors sometimes ignore when franchisees deviate from the norms because franchi-
sors trust their experience. However all major innovations, such as, implementing a
SST, must be approved by the franchisor (Lewin-Solomons, 1999). In any case, major
ideas can be born from franchisee, the company-owned outlet or the company headquar-
17
ters. However, franchisee or a company-owned outlet would need to contact the head-
quarters of the company or meet them in order to present the idea and get the approval
for it (Wilson, 2009)
2.2 Summary of the findings
By looking at the previous research, a number of factors that affect innovation were
identified. These are presented in the table below.
Table 1. Factors influencing innovation in fast food franchises.
1 The proportion of franchisee restaurants in a
franchise system
Lewin-Solomons (1999)
2 The existence of an advisory council Dane (1992); Dandridge (1994)
3 Power Lewin-Solomons (1999); Furquim De Aze-
vedo (2010)
4
Financial resources
(Holman, 2010)
5
Current service philosophies
(Holman, 2010)
6 Presence of champion of innovation (Shane 1994); (Dandridge, 1998)
7 Recognition of new ideas in annual meetings Lewin-Solomons (1999); (Dandridge, 1998)
The authors of this thesis will focus on the first three factors.
2.3Concept Development
2.3.1Roger’s diffusion of innovation
For the purpose of this study, the authors chose Roger’s Diffusion of Innovation process
in order to explain the innovation process in fast food restaurants. According to Rogers
(1995) there exist 5 stages of Diffusion of Innovation:
18
Figure 1.
1. Knowledge
Here the individual is exposed to and aware of an innovation, but is not inspired to find
more information about that innovation.
2. Persuasion
A very large interest regarding an innovation exists and active information gathering
takes place.
3. Decision
Here, advantages and disadvantages (costs) regarding the innovation will be compared
in order to sort out if the innovation should be rejected or accepted.
4. Implementation
The implementation of the innovation. In this stage the innovation is tested, in order to
see if the innovation is useful or not.
5. Confirmation
Decision regarding further use and implementation to its fullest potential will be made
here.
19
According to Lewin-Solomons (1999) creativity usually comes from the franchisees
when it exist a relatively high proportion of franchisees in comparison to company-
owned outlets (for example, in companies such as Burger King and Subway). In these
cases, the main actors in the first two stages (Knowledge and Persuasion) should
therefore be franchisees. However, since the franchisor sets the standards on how a
franchisee should conduct its business, any change proposed by a franchisee would
require the approval by the franchisor. Therefore, stage three (Decision) will be in the
hands of the franchisor. According to Lewin-Solomons (1999), most of the product
testing within companies with high proportion of franchisees takes place in the
franchisees. Leading to franchisees being the main actor during the fourth stage
(Implementation). As mentioned, the power over the franchisees lays at the franchisor.
Therefore, the franchisor will control the final step regarding innovation process
(Confirmation).
On the other hand, Lewin-Solomons (1999) stated that when there exists more
company-owned stores than franchisees, the innovation tends to origin from the
company headquarters and were often implemented in company stores first. Therefore,
in companies with a majority of company-owned outlets, the headquarters would be the
main actor during more or less the entire implementation process, however the
implementation itself (Stage 3) would take place in the local restaurants. This gives the
local management some control over the fourth stage (Implementation) (Lewin-
Solomons 1999).
20
3 Method
Here the method for gathering the empirical data will be presented.
3.1 Arguments for selecting a case study approach
According to Yin (2003) three conditions should be taken into consideration when
choosing a research strategy: 1) the type of a research question, 2) the degree of control
the author has over the study units and 3) research focus on contemporary as opposed to
historical phenomena (Yin, 2003). The authors have chosen a case study because this
study looks more at operational links of the phenomenon rather than incidence or preva-
lence of the phenomenon. It also emphasizes on explaining how organizational structure
affects the innovation process. According to Yin (2003) “how” and “why” questions are
more exploratory and lead towards case studies, experiments and histories.
According to Baxter and Jack (2008) case study is by far the best method to address the
context issue. Moreover, the qualitative research study is useful when researchers want
to explore a phenomenon within a context. Since exploring the phenomenon and its
context helps to better understand all aspects that affects and shapes the phenomenon
(Baxter, 2008). Baxter and Jack (2008) also said that a case study in an organizational
research usually concerns people or groups of people that are operating within and
around the organization. Thus, this research seeks to explain the phenomenon by inves-
tigating the role of the local management of a fast food company and its affect of the in-
novation process. The layer that is of particular importance for this study is the local
management. However, since the company headquarters and other players that also has
a considerable stake in the organization, and therefore influence the innovation process,
will be included in this study. An example of these stakeholders is the independent con-
tractor called “development agent” in Subway, whose function is to supervise franchi-
sees in the field.
3.2 Pilot study
Before establishing the purpose of this thesis, a pilot study was conducted in order to
get an increased knowledge regarding the general mindset of local restaurant manage-
ment, when it came to new innovations and technology. This study, which took place at
several restaurants and cafés in Jonkoping, made the authors realize that not every res-
21
taurant and café was interested in new innovations and technology. When asking man-
agers at local restaurants and cafés about implementing new innovations such as SST´s,
the managers saw more losses than benefits. The general response was that by installing
a SST the restaurant would lose the personal service which counted for up to 40% of the
restaurant experience, according to a manager at Twin City.
During the pilot study, it became clear that restaurants and cafés did not want to speed
up the ordering process by implementing new innovations and SST´s. Instead, they
want to focus more on personal service and make sure that the customers stays satisfied
during their stay in the restaurant. However, during the interview with a fast food res-
taurant manager, he pointed out that the industry (fast food) tends to focus more on time
and speed than “normal” restaurants. He also saw the ordering process as a “bottle-
neck” which could be improved by implementing innovations such as SST´s.
Therefore, the authors decided to only focus on the fast food industry while continuing
their work on this thesis.
3.3 Case selection
3.3.1 Location of Research
A several number of international fast food franchises operates in Sweden, for example;
McDonald’s, Burger King, Pizza Hut and Subway. Together with several Swedish
branches, for example Frasses, Max and Sibylla the supply of fast food restaurants in
Sweden is relatively high. Since the amount of fast food restaurants in Jonkoping keeps
growing, with a new Max restaurant, a new Subway restaurant and a Burger King res-
taurant opening as late as last fall (Fall 2010), it is also fare to say that the fast food i n-
dustry in Jonkoping is at least successful. Jonkoping also has a geographic location that
allows many travelers to pass through the city and will therefore beneficially serve as
research location for this thesis.
3.3.1.1 Subway
Subway is an international fast food franchise with over 34 600 franchisees in 98 coun-
tries (Subway, 2011, 20 May). Subway is currently listed number 9 in the Entrepre-
22
neur's 2011 Franchise 500® list as one of the fastest growing franchise systems in the
world (Stapp, Februari 2011) Additionally, Subway overtook McDonald’s as the
world’s largest restaurant chain earlier this year (BBC News, March 9, 2011). Subway
also was the most popular international fast food franchisee in Sweden last year (2010),
according to a market research conducted by ISI Winning (2011) and took the 3rd place
in most popular fast food company in Sweden, after the two domestic companies Max
and Sibylla. Subway is entirely franchised and owned by Doctor´s Associates, Inc.
(DAI) according to Lewin-Solomons (1999). DAI consists of a few number of people,
therefore they do not have the power to supervise and support the franchise. Instead, the
Subway Franchise Owners Advisory Council, (SFOAC) provides support to the franchi-
sees and supervising the franchise is delegated to independent contractors (Lewin-
Solomons, 1999)
Two of Subway´s franchisees are located in the city center of Jonkoping, Sweden. In
comparison to the other international franchises located in Jonkoping, (McDonald’s and
Burger King) Subway´s ordering system is focused on individual choices, where every
customer makes an order in 7 different stages (see appendix 3)
This relatively intense ordering process demands a higher involvement from the cus-
tomer than in other fast food franchises. In other fast food franchises the meals are more
or less pre-set (i.e. if the costumer do not tell the restaurant that they want something
removed, added or changed, they restaurant will offer the customer the original pre-set
menu).
Subway was a subject to a tremendous sales increase which was caused by the initiative
of a small “subway” shop owner Stuart Frankel. During the times of recession, he
started offering a footlong Subway sandwich for 5$ which was about 1$ dollar cheaper
than before. Surprisingly, this change in price was very appealing to the customers. The
idea quickly spread among other Subways all around the world and generated remarka-
ble 3.8$ billion sales throughout the chain. This idea even reached Swedish franchisees,
where they had an opportunity to sell footlong sandwiches for 55 SEK. “Frankel's $5
footlong idea illustrates how a huge company can wake up and eventually seize on a
good idea that's not generated at headquarters” (Boyle, 2009).
Therefore, the authors of this thesis believed that the implementation of a SST at Sub-
way would have a greater benefit to its customers (and personnel) than in any other fast
23
food franchise operating in Jonkoping. The local management should therefore be more
interested in the innovation and more motivated to participate in this research.
3.3.1.2 Max
Max was the most popular fast food company in Sweden last year (2010), according to
a market research conducted by ISI Winning (2011). It is also one of the largest Swe-
dish fast food restaurant chains, with currently 82 restaurants located in Sweden, with
three company owned restaurants located in Jonkoping (max.se, 20 May). The head-
quarters are located in Lulea, Sweden. The restaurant located at Ekhagen nearby the
highway E4 already has an SST implemented in form of an “Express-cashier” where the
customers can make their orders and pay by credit card and then receive their orders at a
specific “Express-cashier” handout desk.
The authors believed Max to be a good opposite to Subway. Max already had started
implementing SST’s in Jonkoping and since the majority of restaurants are company-
owned, it would provide the authors with a different setting. Additionally, Max origins
from Sweden where it exclusively operates in comparison with Subway which origi-
nated in the U.S. and then expanded abroad and now operates globally.
3.3.2 Selection of study units
In statistical sampling, “bias” is considered a weakness and should be avoided. Howev-
er, this approach is considered as strength in a qualitative research. The idea behind “bi-
ased sampling” or so called “purposeful sampling” is to select information-rich cases
from which authors can learn about issues which are of great importance when answer-
ing research questions (Patton, 2002)
The most important thing when selecting cases was to find companies that had very dif-
ferent proportions of franchisee and company-owned establishments in their organiza-
tion. It was also not feasible to include all restaurants in this research due to lack of
time. Therefore, the authors choose to use purposeful sampling to represent two typical
organizational structures that comprise fast food companies: franchise and company-
owned outlets.
Thus, Subway and Max were seen as the best choices, because the former company is
entirely franchised while the later being almost entirely company-owned, except one
24
single franchisee. Additionally, another reason for choosing these two companies was
the fact that both of them have implemented SST´s in some of their restaurants. Max
has implemented this type of innovation in one of the restaurants located in Jonkoping
while Subway has implemented this type of innovation in restaurants located in the U.S.
Therefore, by selecting Max and Subway authors of this thesis are confident that the
study units are innovative and not afraid to experiment with new technologies.
3.4 Data Collection
In order to fulfill the purpose of this research, the authors conducted interviews with
employees and restaurant managers within Subway and Max-restaurants located in Jon-
koping. The aim of these interviews was to get an increased knowledge regarding the
organizational structure and the decision making process within these two companies.
First, an initial contact was made over phone in order to book a meeting and to discuss
the purpose of the thesis with the managers. A meeting at the local restaurants then took
place in order to analyze the current mindset, knowledge, interest and power of the local
managers regarding the implementation of SST´s and other innovations.
Semi-structured interviews with the restaurant managers were used in order to receive
background information regarding the restaurant and the manager. By using a semi-
structured approach, the managers were free to talk about their situation and/or issues
regarding their contact with the higher level managers, while the authors lead the inter-
views with questions so that the interview maintained relevant for the research.
(See Table 2).
According to Bouchard (1976), interviewing takes advantage of language, which is the
most powerful form of communication among human beings and a tremendous amount
of time and effort could be saved by asking questions in order to retrieve information.
(Bouchard, 1976).
After the initial pilot study, the authors conducted interviews at five different fast food
restaurants located in Jonkoping: three Max-restaurants and two Subway-restaurants.
The internal names for the Max-restaurants were numbers according to their “chrono-
25
logical order” (i.e the first Max-restaurant was called “Max 1”, the second “Max 2” etc.
Therefore, the managers interviewed in this research will be named according to their
restaurant: manager at “Max 1” will be called “M1” etc.) The same system was also
used by the authors when referring to the two Subway managers (i.e S1 and S2).
After interviewing the local management within Subway, authors received two different
views regarding the communication and the decision-making process. Therefore, the
authors felt a need for contacting higher level management in order to sort out these
views and to receive additional information.
Table 2. Overview over the restaurants, interviewees, place, time, length and language
of interview.
Restaurant Name Place of in-
terview
Length
of inter-
view
Time &
date
when in-
terview
started
Language of
interview
Pilot study
Twin City Bar 10 min February
3,
11.00am
Swedish
Coffeehouse by Geor-
ge
Order desk 10 min February
7,
09.00am
Swedish
Wayne´s Coffee Customer
dining area
10 min February
8,
09.00am
Swedish
Subway, Filmstaden Customer
dining area
20 min February
9, 3.00 pm
English
Fast food restaurants
Manager at Max Jordb-
rovagen
M1a Staff dining
room
40 min
combi-
ned
April 6,
6.00 pm
Eng-
lish/Swedish*
Assistant Manager at
Max Jordbrovagen
M1b
Manager at Max Herku-
lesvagen
M2 Kitchen of
the restau-
rant
12 min April 15,
09.45am
Swedish
26
Restaurant Name Place of in-
terview
Length
of inter-
view
Time &
date
when in-
terview
started
Language of
interview
Manager at Max Ekha-
gen
M3 Customer
dining area
25 min March 3,
09.00 am
Swedish
Manager at Subway
East
S1 Customer
dining area
30 min April 5,
10.00am
English
Manager at Subway
Filmstaden
S2 Customer
dining area
20 min
May 4,
3.30 pm
Swedish
Confirmation interviews
Amsterdam Customer
Service and Communi-
cation coordinator
AC E-mail-
conversation
May 10 English
Regional manager,
Subway
RS Phone inter-
view
20 min May 17,
10.00 am
English
Regional manager,
Subway
RS Phone inter-
view
8 min May 23,
09.00 am
Swedish
Manager at Subway
Filmstaden
S2 Outside ser-
ving area
5 min May 23,
09.14 am
English
Manager at Subway
East
S1 Customer
dining area
15 min May 23,
2.00 pm
English
* The interview started in English, however due to language constraints the language
changed to Swedish in order to maximize the information from the interviewees.
3.4.1 Language of the interview
Regarding the language of the interviews, the aim was to use English in order to minim-
ize the risk for translation errors. However, since the research was conducted in Jonkop-
ing, Sweden and the interviews were held with Swedish managers, the majority of the
interviews were held in Swedish in order to make it as convenient as possible for the in-
terviewees. By using their native language, the managers felt more comfortable in the
situation and could supply the interviewers with more in-depth answers and express
27
their thoughts and opinions in a more detailed way. Two of the authors are native
Swedes, which made it possible to conduct these interviews in Swedish.
The empirical data received from these interviews was then translated into English and
transcribed in order to suit the thesis. The interviews were recorded in order to allow the
interviewers to focus on the interviews and to minimize the risk for errors and misun-
derstandings which could appear while taking notes. Permission of recording the inter-
views was given from the interviewees, before the recording started.
3.4.2 Interview Techniques
One of the main goals during the interviews was to keep the interviewees motivated and
interested during the entire interview, in order to receive as much information as possi-
ble from the interviewees. Another important aspect is that the interviewee feels com-
fortable in the situation and can trust the interviewer. Bouchard (1976) discuss some
useful tactics that could be used in order to achieve these goals:
1. Maximize privacy
An interview should take place in a setting where no one can overhear the interview.
The interviews took place in the respective restaurant, with the interviewees choosing
the specific location. This seemed to be the best solution, since it would be a place
where the interviewees would feel comfortable while it also gives the interviewee the
opportunity to decide the level of privacy.
2. Know whom you are talking to.
During the initial contact with the restaurants, a request to talk to the manger was
made. Names of people the authors were in contact with was noted and used during
the interviews.
3. Maintain neutrality
No bias information was shared by the interviewers. The role of the interviewer was
exclusively to retrieve as much relevant information as possible from the interviews
and to let the interviewees express their own thoughts and opinions to their fullest.
28
4. Maintain confidentiality
No specific information regarding an interviewee was shared with another intervie-
wee. The interviews were held confidential. (However, some information regarding
other interviewees was shared, see “Tactic no.7”).
5. Listen
Listening during an interview is just as important as obvious. Not showing interest as
an interviewer leads to decreased motivation and interest for the interviewee. There-
fore it was highly important for the interviewer to be listening during the interview,
even though the interviews were being recorded. By listening to the interviewee the
interviewer was also able to know if any follow-up question could be asked in order
to retrieve a more in-depth and detailed answer.
6. Cooling out
During an interview, there exist a risk that the interviewee reveals “too much” or
classified information. This could lead to a more reserved attitude in future inter-
views, especially of the interviews range over a long period of time and with other in-
terviewees, according to Bouchard (1976). In order to prevent this, the interviewer
utilized the “cooling out”-technique by ending the interview in a more relaxed man-
ner. This will lead to a decreased risk for reserved attitude in future interviews, ac-
cording to Bouchard (1976).
7. Inform all respondents about who will be interviewed and how they were
chosen.
According to Bouchard (1976), it is important to inform the interviewee about why
he/she was chosen for the interview. Along with additional information about who
else was participating in the research, uncomfortable questions from the interviewee
regarding the selection of interviewees could be answered.
The authors informed the interviewees about why they had been chosen for the inter-
views, together with information about who else will be, or has been interviewed dur-
ing the research.
29
8. Identify yourself.
For the interviews conducted in this research the initial contact was made over phone,
where the researchers presented themselves and the purpose of the interview. Addi-
tionally a short introduction about the research and the authors was made at the inter-
view in order to let the interviewees know who the authors were and why the inter-
view was conducted.
3.4.3 Interview guide.
According to Patton (2002, p 343-344): “An interview guide lists the questions or issues
that are to be explored in the course of an interview”. Interview guide is important to in-
sure that respondents are being asked more or less the same questions. Interview guides
can be very detailed or it can be less detailed, which depends on two things: (1) the ex-
tent to which researchers are able to identify the important topics beforehand, and (2)
the researchers’ willingness to ask questions in the same order to all interviewees (Pat-
ton, 2002).
By looking at the previous research, the authors of this thesis have been able to identify
the relevant topics that had to be discussed with respondents in order to fulfill the pur-
pose of this thesis. The main topics that emerged from the theoretical framework and
were covered in the interviews were the following:
Origins of creativity within organizations
The amount of power local management holds when it comes to innovations.
Degree of independence over decision making.
Knowledge about Self-service technology
Patterns of communication within organization.
Vertical communication between local management and higher level managers.
Horizontal communication among local managers.
Effectiveness and frequency of communication
Different support mechanisms from higher managers to local management.
30
3.5 Data analysis
“The analysis of case study evidence is one of the least developed and most difficult as-
pects of doing case studies.” (Yin, 2003, p 109). By this, Yin (2003), mean that re-
searchers often begin a case study without knowing how to analyze the results.
3.5.1 Inductive vs. Deductive approach
Patton (2002) defines inductive analysis as discovering patterns and thesis that emerge
from the data collected. In contrast, deductive approach is when the data is being ana-
lyzed in relation to the previously developed theoretical framework. Patton (2002) ar-
gues that qualitative analysis is typically inductive at the beginning where themes, cate-
gories and patterns emerge. After these have been established, the deductive approach
can take place when testing and affirming the validity and suitability of the inductive
content analysis.
However, Patton (2002, p. 454) also discusses Analytic induction as a way to analyze in
qualitative research. He states: “Analytic induction… begins with an analyst’s deducted
propositions or theory-derived hypotheses”; “and then inductive … when analyst begins
by examining the data in terms of theory-derived sensitizing concepts or applying a
theoretical framework developed by someone else”.
Gilgun (1995) added:
“In analytic induction, researchers develop hypothesis, sometimes rough and general
approximations, prior to entry to the field. These hypotheses can be based on assump-
tions, careful examination of research and theory, or combinations. Hypothesis are re-
vised to fit emerging interpretations of the data over the course of data collection and
analysis” (Gilgun, 1995, p. 268-69).
In the beginning the authors of this thesis were using propositions as a tool to guide the
process of the analysis. However, propositions were derived from the research ques-
tions, which in fact were derived from the theoretical framework. So, the authors of this
thesis decided to use only research questions and incorporated the propositions in to the
research questions, since they both stated the same.
Thus, the authors of this thesis deducted theory to the research questions instead of
propositions. Later, authors examined the data by linking it to the theory-derived con-
31
cepts developed in the theoretical framework. As well as applied Rogers’ Diffusion of
Innovation to a fast food restaurant setting.
3.5.2 Cross case analysis
Analytic induction, which is the strategy used for this thesis, also includes cross-case
analysis or “qualitative comparative analysis” as a tool to search for explanations of the
phenomenon under study (Patton, 2002, p. 492). Denzin (1978) identified that in analyt-
ical induction one can use cross-case analysis to compare carefully prepared case stu-
dies and then use this comparison to explain the phenomenon.
Ragin (2000) defined cross-case analysis as “qualitative comparative analysis”, which
focused on making systematic comparisons among a number of cases. Ragin (2000) has
used this approach, which entailed taking into account both the uniqueness and commo-
nalities between the cases, thereby explaining similarities and differences between them.
3.6 Trustworthiness
Shenton (2004) has derived some strategies for ensuring trustworthiness in qualitative
research projects by combining and discussing several researches on the subject. Dis-
cussing the trustworthiness of a research, four main issues are addressed; credibility,
transferability, dependability and confirmability. These will all be addressed below.
3.6.1 Credibility
Shenton (2004), discussed several strategies to ensure credibility of the research. The
authors focused on some of them:
1. The adoption of research methods well established.
The adoption of research methods well established is the idea of using proved methods
of gathering data, construct questions etc (Shenton, 2004). In this thesis the authors
have made extensive research on the subject to find previous research that was of great
importance for this thesis. By this, the authors were able to find strong and relevant
theories for their thesis. Most of the researchers, especially those studying entrepreneur-
ship within franchise systems (Lewin-Solomons, 1999; Sundbo, 2010) and plural forms
within franchising (Bradach, 1997), were using a case study approach. These articles
guided the creation of relevant research questions and purpose of this research, which
32
were adjusted slightly after conducting a pilot study. Since the aim of this thesis was to
explore how the local management affect the innovation process, within fast food res-
taurant chains, using a case study approach seemed to be the most suitable. Hence, this
thesis bases its theories, concepts and approach on previous and well established re-
search.
2. Tactics to help ensure honesty in informants.
The participants should be given the opportunity to refuse participation of the data col-
lection. It is also important that the participants feel that they can speak freely, contri-
bute with ideas and share their experience without being afraid of losing credibility to
higher level management (Shenton, 2004).
For this thesis, the main data collection tool was interviews. During these interviews the
tactics by Bouchard (1976) was implemented to ensure that the interviews where prop-
erly conducted. By utilizing Bouchard´s (1976) tactics and an informal structure of the
interview, the authors were able to create a relaxing atmosphere. The participants were
allowed to speak freely and encouraged to share their experiences. In addition, by keep-
ing confidentiality, no information from interviews was revealed to other managers. So
by the tactics derived from Bouchard (1976), the authors of this thesis strived towards
ensuring honesty from the informants.
3. The researchers “reflective commentary”.
The researchers should evaluate their own work as it progresses. A reflective commen-
tary part may be constructed to discuss effectiveness of methods, initial analysis of data
collection etc (Shenton, 2004).
A reflective commentary part has not been included in this thesis, however, throughout
the research the authors have constantly evaluated the ongoing work. Some discussion
takes place in the discussion section in the end of the thesis. Additionally, the benefit of
being three researchers is clear in the evaluation process, since it will immediately be
evaluated by three different minds.
33
4. Examination of previous research:
In order to increase credibility, one aspect can be to investigate how the research cor-
responds to previous research made in the same organization or issue (Shenton, 2004).
Research about Subway as well as related issues was found and discussed by the au-
thors of this thesis. A majority of the findings of this thesis corresponds to previous re-
search, which increases the credibility of these findings.
Taking all this (these strategies) in to consideration, this thesis is credible due to the fact
that: It is based on well established methods, honesty of the participants is considered to
be achieved , critical self-evaluation has been made by the authors and findings has
been compared to previous relevant research.
3.6.2 Transferability
In order to increase the transferability of the research, some information regarding the
method should be provided. Shenton (2004), mention several important aspects that
should be addressed. These are: The number of organizations taking part and their loca-
tion, any restrictions in people contributing to the data, number of participants in the
fieldwork, data collection methods, number and length of data collection sessions and
the time period which the data was collected.
This information is shown in Table 2 where it is easy to see when and how the inter-
views were conducted. Further information is discussed in the method section.
Additionally, the authors believe that this research is applicable not only to fast food
restaurants, but also other types of companies. A local franchise manager or local man-
ager at a company-owned outlet in a retailing company is likely to share similar expe-
riences as the fast food managers. Therefore this research could apply to all companies
that utilize either franchise or company-owned outlet system to operate their business.
3.6.3 Dependability
“In order to address the dependability issue more directly, the processes within the
study should be reported in detail, thereby enabling a future researcher to repeat the
work, if not necessarily to gain the same results.” (Shenton, 2004, p. 71.)
34
Shenton (2004) also mentions three aspects that should be incorporated in the research:
The research design and implementation, detail of data gathering, reflection of the
project.
For this research, the authors have described the research process and the tools for ga-
thering data to the best of their ability. The authors believe that a replication of this re-
search is possible, however, if performed in a different setting or location the result may
not be the same. Although, when it comes to dependability, this thesis is very much rep-
licable.
3.6.4 Confirmability
Confirmability is another strategy to ensure the objectivity of the research. A detailed
method on how the research was conducted is important, in order for the reader to de-
cide whether the research has been objective (Shenton, 2004). Also, the authors have to
make sure that the result comes from the participants who provide the researchers with
information, rather than the result coming from the researcher’s beliefs. Additionally,
Shenton (2004), also mentions the “reflective commentary” as an important mean of
dealing with confirmability.
As stated above, the authors of this thesis have written a detailed method section and
explained step-by-step how the research was conducted. Throughout the research, the
authors have been reflective and critical to findings and methods used.
3.7 Interpretation of the data
Lofland (1971, p. 62) argued that it is suitable to “provide an orderly description of rich,
descriptive detail” or in other words – to interpret the data. Patton (2002, p. 480) de-
fined interpretation as “attaching significance to what was found, making sense of find-
ings, offering explanations, drawing conclusion … imposing order on an unruly but
surely patterned world”. In this thesis authors interpreted rich data in order to make
sense of what was found, offered explanations and drew relevant conclusions. Patton
(2002), by judging from Schlechty and Noblit (1982) conclusions, explained that stake-
holders of any research expect three things:
“(1) Confirm what we know that is supported by data, (2) disabuse us of misconcep-
tions, and (3) illuminate important things that we didn’t know but should know. Ac-
35
complishing these three things and those interested in the findings can take it from
here”.
Authors of this thesis have found a lot of data that confirmed findings derived from
theoretical framework. Additionally, authors also managed to find important things that
were not stressed by previous research, such as the fact that a “Subway” restaurant can
be creative as long it implements innovations outside the “Subway” restaurant. Thus,
the stakeholders are left free to judge these findings and make their own interpretations.
36
4 Results
In this section the authors will present the result of the research. This result has been
categorized under different headings in order to increase the readability.
4.1 Current relationship with SST’s
4.1.1 Max
Max Ekhagen (the newest Max restaurant located in Jonkoping which opened up in
September 2010) is the only Max restaurant in Jonkoping which already has a SST im-
plemented. An “express-cashier” where customers can order and pay via a touch-screen
and then receive their order at another cashier. From day one, the SST has been running
in the restaurant and improved the ordering process for customers, M3 said. The prima-
ry benefit of using this SST is that it increases the speed of orders with the secondary ef-
fect that it also decreases labor costs since it replaces up to three normal cashiers, M3
explained. M3 only saw benefits with using the SST, except in the beginning when
some employees left their normal cashier in order to serve the SST cashier. The SST has
the highest ranking of all the different cashiers at Max (1. SST, 2. Drive-In, 3. Normal),
however M3 said that “even though it is our highest priority, the other customers should
not be left alone.” This kind of SST is part of a specific Max restaurant model which ex-
ists at around seven other locations in Sweden, according to M3. M3 said that the instal-
lation of the SST was already made when he became manager at Max Ekhagen, there-
fore M3 did not have any power over the implementation.
The other two Max restaurants have had visits regarding the possibilities for a SST-
implementation, however, no implementation has been made due to lack of space, ac-
cording to all the local Max restaurant mangers. When asking about the lack of an “ex-
press-cashier” both M1a and M2 pointed at the regular cashiers and answered humo-
rously: “We have four express-cashiers already”. M2 said that he had great knowledge
about SST´s in general, but not to work-related technologies. All the cashiers within
Max, both SST and normal cashiers, are connected to a company in Lulea where the
servers are located and where they store all the data, M2 said. The computers at the lo-
cal restaurants are just empty shells, he continued. Even though the type of SST located
at Max Ekhagen most likely will not be implemented at Max Herkulesvagen, M2 said
that other types of innovations and SST´s will most likely be implemented., for example
37
the ability to pay via Internet.. The people up in Lulea think ahead and about the future,
he added.
4.1.2 Subway
Neither of the two Subway restaurants are currently using any form of SST, however S2
is aware of the existence within Subway and thinks it will reach Swedish Subway res-
taurants and Jonkoping in a couple of years: “It is like everything else, now it is a really
big thing in the US, but it will not be here until 3-4 years.” he said. He mentioned the
possibility to order online, which now is reality in Subway restaurants in the US, as an
example. S1 was not familiar with any form of SST, neither was he aware of the possi-
bility to order online in the US. When asked, S2 were not sure if he needed a SST, how-
ever “it will probably cause more good than bad”, he said.
4.2 Comparison with competitors
4.2.1 Max
When discussing the restaurants strengths and weaknesses towards their competitors,
M1b quickly made comparisons with McDonald’s.
“McDonald’s make fast food and it works like a robot. No feeling, it is only about func-
tionality and money. Max employees on the other hand, they work more as humans, with
ups and downs but with more feeling in the food”, M1b said.
Both M1a and M1b explained this difference with Max being a family owned restaurant
and that it is easy for the personnel to know who is in charge. At McDonald’s the em-
ployees just work and they do not know who the top manager is, M1a continued. The
strength, according to M2, is that Max is Swedish and all the decisions are made in
Sweden.
Customers at Max are more willing to wait an extra minute for the food, therefore it is
more likely to call Max a “restaurant” than to call McDonald’s a “restaurant”, according
to M1b. When asking about any weakness within the restaurant M1a answers that Max
market themselves as the best restaurant in Sweden, therefore no weakness can be men-
38
tioned. However, M1b made a comparison with the “robots” at McDonalds and said:
“We are like a human, we have human weaknesses”.
4.2.2 Subway
The strengths at Subway are the fresh food and the ability for customers to see it, ac-
cording to S1. Even though neither of the Subway-managers could recognize any weak-
nesses, S2 discovered an external problem: “Swedish customers are too nice” he said.
American customers know exactly what they want and how they want it, S2 continued.
“Swedish customers are not used to make their own decisions when it comes to eating,
instead they look at a menu and want to choose from it.” he added.
4.3 Communication
4.3.1 Max
While discussing the company-owned structure within the restaurant, M1b explained
that there exists one Max franchise, Max Arlanda. Max is also currently broadening
their operation into Norway, where a Norwegian family-owned company has bought the
franchising rights, M1b said. However, staff from Max Sweden will support the new
franchisee during the start up process, M1a added. M1a and M1b then continued to talk
about why it do not exist that many franchisees within Max and concluded:
“It is because everyone in the company is concerned about the brand. For example, al-
most every manager within Max is recruited from within the company” M1b said.
Continuing with talking about their contact with higher managers, M1a said that she
should have better contact with their regional manager, but that they do have weekly
meetings every Monday. There will be a change in the region and a new manager will
be added and located in Jonkoping, M1a said. Both M1a and M1b hoped that this
change will improve the contact with the regional manager. The owners of Max usually
visit the restaurant once or twice per year, M1a said. A monthly newsletter is also sent
out from the higher managers and if they have done something really good, the restau-
rant will receive an additional e-mail. Even though there is room for more communica-
tion between the local and higher managers, M1a did not feel that there existed a need
for any change regarding the communication.
39
M1b talked about rewards and encouragement and stated that it did not really exist,
however it was always possible to bring new ideas to the table. Everyone had the ability
to send ideas to the higher or top managers and receive a response. Max also has a com-
pany magazine with greetings from every district manager as well as greetings from
other personnel which is distributed quarterly, he said. M1a continued to talk about the
vertical integration and said that if they had any problems or issues they could easily
talk to their higher level managers. First, local managers are recommended to talk to
their regional manager, and if that do not work it is possible to, in worst case go to the
owners directly, M1a said. “The regional manager of Jonkoping has a position in the
Board of Operations of Max, therefore it is very easy to share any opinion or thought
with the top managers” M2 added.
Addressing the horizontal communication among the local management, M1a said that:
“Regional meetings for managers are held quarterly, with all the managers within the
region. Larger meetings and conferences with every Max restaurant manager in Swe-
den is held once a year, however during a startup process or when becoming a manag-
er, more meetings and educations occur” (M1a)
Both the vertical and horizontal contact was perceived as good, according to both M1a
and M1b. The local managers had more horizontal contact but received good response
from higher level managers as well, M1b said. Something that M2 confirmed. The man-
agers in Jonkoping meet on monthly basis to discuss the current situation and to plan for
the future. The Max personnel in Jonkoping also play floorball on regular basis, accord-
ing to M2.
Within Max it is also possible for the employees to transfer between the restaurants,
M1b said. When a new restaurant is opening up, employees from nearby restaurants will
assist the new restaurant with workforce and education during the first couple of
months, M1b continued. M1a added that when she felt insecure she could call M2 and
ask for help. Something that occurred nearly on a daily basis, according to M1a.
40
4.3.2 Subway
The vertical communication within Subway was perceived as good, according to both
S1 and S2. They both felt that they got the support they needed from higher level man-
agement.
However, in the beginning S1 did not have as much support because “the development
agents were old and tired, but the new agents are better.” S1 said. S1 continued to say
that the development agents made monthly check-ups to see if the restaurant was fol-
lowing the rules and standards. RS confirmed that monthly visits were made and added
that it was mainly to ensure that the restaurants were following the operations manual
(internally called “the Subway Bible”).
Daily e-mail contact between the headquarters and the local restaurants also existed, ac-
cording to S1. S2 agreed that frequent e-mail contact existed, but used the description
“minimum once a week” when asked how frequently. When asked about the purpose of
these e-mails, S2 explained that e-mails were used for communicating all kinds of is-
sues that were of particular importance to local and higher level management and could
include marketing campaigns, news from headquarters, problems, suggestions etc.
When discussing this type of communication, S2 said that he was very satisfied with it
and claimed that e-mails was a good way to reach the higher level management. Mainly
because of two reasons; (1) it was a two way communication, meaning that both local
and higher level management could use e-mails to communicate with each other and (2)
e-mails were frequent, with fast responses from higher level management. S1 agreed
and did not see any problems with the e-mail communication.
Another form of communication that existed within Subway was phone-conferences
that occurred four to five times per year and included all the franchises in the south of
Sweden, according to S2. Both the franchisees were satisfied with this type of commu-
nication as well and S1 added that “a lot will depend on what type of person you are. If
you are more aggressive and like to express your opinion, then you will be better
heard”. For “shy” franchisee managers, S1 added that e-mail communication always ex-
isted at their disposal.
41
S1 mentioned that they usually got information about new franchisees such as, how and
where they were launched. In addition franchisees could also present new ideas. S2
added that sometimes during these conferences they could vote regarding important de-
cisions. For example, franchisees in the south of Sweden recently voted for new rules
on how to distribute advertising funds, according to S2. However, decisions that usually
got made during these conferences focused on new sandwiches, coupons or other mar-
keting related issues, according to S2. Even though general horizontal communication
existed within the franchise, no local communication or collaboration was discovered.
S2 mentioned that some attempts to collaborate had been made, however no one of the
franchisees could explain why they did not collaborate.
All the franchisees in Sweden are divided into four parts: North, West, South and East.
Each of these regions has a regional manager who overlooks the franchisees in that par-
ticular region and usually acts as a development agent for them, said S1. Annual meet-
ings occurred once per year with all the franchisees and regional managers in Sweden.
Sometimes during these meetings, franchisees voted for the implementation of a new
innovation. S1 gave the example of the promotional campaign “Sub of the day”.
S2 said that, if he had any suggestions regarding improvements or innovations, he
would try to get in contact with the regional managers in Gothenburg who then would
try to contact the U.S. headquarters. He continued by saying that he sometimes called
the managers in Gothenburg three to four times without any respond and that it was
“generally hard to get in contact with them”. S2 also added that the regional managers
in Gothenburg were the only higher level managers he came in contact with, unless he
chose to contact the U.S. directly. This sometimes occurred when there was a problem
with the checkout-system etc., according to S2. S1 said that when suggesting a new in-
novation he would contact the regional managers, however the regional managers would
then contact the European headquarters in Holland, according to S1.
Initially, S1 said that he would contact the “development agent”. However, during a
phone-interview with the regional manager, the regional manager explained that he was
also the development agent. The regional manager/development agent added that the
42
recommended way of communication was through the European headquarter in Hol-
land. However, he also added that “it is really not that clear... I would vote for Holland.”
Additionally, there existed two different types of national committees within Subway; a
marketing committee and a product committee, according to RS. They discussed if any
changes should be made within the assortment of the franchisees or if any other food- or
marketing related changes should be made. RS said that the franchisees had more repre-
sentatives in the marketing committee than in the product committee, due to a lack of
interest for the latter one. RS further explained that the marketing among the franchisees
was not controlled by Subway. “It´s a separate company...which is owned by all the
franchisees” RS said.
Neither of the two franchisees knew about the existence of the product committee. They
only knew that there existed a body which represents franchisees when it came to mar-
keting and that franchisees can nominate themselves and get elected. S1 mentioned that
he got this information in one of the e-mails sent to him.
Even though there are numerous ways how franchisees can communicate with higher
level management, S1 and S2 assured that they did not feel confused because of that
and they seemed to knew exactly which channel to use in the any particular situation.
4.4 Innovation, changes and power distribution
4.4.1 Max
Talking about creativity and the innovation process, M1a said that “it comes from
above, since they have time to think about it every day.” New innovations and non-local
changes within Max, for example introduction of a new burger, will come from the
headquarters, according to M3. The same if the grills need to be replaced, M2 added.
Something that headquarters recently decided to do. The headquarters notified the local
managers about it four months in advance and then came and installed the grills during
two nights, M2 said. The new grills are part of a new cooking concept, where the old
“slim-food” approach will be broaden into a gourmet way of thinking, according to
M1b.
43
M1a admitted that unnecessary changes had been made due to decisions made by higher
level managers and not by the personnel at the local restaurant.
M1b filled in that it was usually a great idea in theory, but very hard to solve in reality.
The higher level manager came up with an idea and said: “This is how you should do
it.”, but it does not work like that, M1a said. It is up to the local managers to solve the
problem and make it work, M1b continued. The phenomenon of unnecessary changes is
something that sometimes occurred for M2 as well. “But you get used to it” he said. M2
said that he had pretty much control over these situations and added that he had the pos-
sibility to share his thoughts and opinions with higher level managers.
“I am not sure if they listen to me, but at least I can say what I am thinking”, M2 said.
When asked if there existed anything they would like to change within the restaurant,
M2 said that he would like to make some small changes and mentioned the drive-in as
an example. “But it is not my wallet”, he added.
Overall, both M1a and M1b were satisfied with the decisions that came from higher
level managers, however some specific changes or improvements took too long time to
be made. For example, a new ice-cream machine. “It breaks down every summer.” M1a
said. M1a continued to say that Max Jordbrovagen is the oldest Max restaurant in the
south of Sweden, therefore higher level managers should get them a new ice-cream ma-
chine, according to M1a.
Asking about their personal interest of having more power, M1a answered “Not right
now, ask me in a year”. M1b answered that:
“It is important that Max maintains control over the restaurants and keeps every res-
taurant the same, otherwise every restaurant will look different. It should be the same
all over so that a customer can eat and experience the same everywhere” M1b said.
However, “Stockholm is Stockholm” M1a said and refereed to that the restaurants in
Stockholm sometimes introduces new hamburgers that are not served in the rest of
Sweden.
Talking about the decision making process, M1b explained that the local restaurants
themselves are responsible for marketing, as long as they get approval from higher level
managers before. There exist local marketing campaigns, with all the Max restaurants
44
located in Jonkoping. No marketing is made individually for one single restaurant, M2
said. The need for higher level manager´s approval also takes place when it comes to
making other changes within the restaurant, although “minor” changes can be made
within the restaurant without the approval from higher level managers, according to all
the Max restaurant managers. During the interview with M2, he revealed that a change
becomes “major” when the cost exceeds 10 000 SEK. However for a change around
9000 SEK he will need to provide good arguments for it, he added. It also depends from
person to person, M1b said:
“If a manager have been working at a restaurant for 10 years and someone else is
working on a trail employment, obviously the experienced manager will get more power
over making changes” M1b continues.
4.4.2 Subway
The manager in Amsterdam, AM, alleged that a lot of innovations came from the fran-
chisees and mentioned the tremendously successful “5 dollar footlong” campaign. RS
confirmed AM’s argument by stating that all the ideas that reached the food and market-
ing committees were initiated from the franchisees. RS said that his communication
with franchisees was more formal and revolved around compliance to the standards and
rules which were stated in the operations manual. S1 could negotiate and argue for a
change that seemed to be unnecessary and then reach a compromise with the develop-
ment agent. However, creativity could not violate the regulations set up by the opera-
tional manual.
“They can’t tell me to put the table in the middle of the room, but if I had a soda in the
fridge that I was not allowed to have they would say that I have to take it away, I would
not have anything to say about that.” S1 said.
RS explained how the innovation process would look like if a franchisee would like to
reach out with a new idea to the top management. The idea would first reach the product
or marketing committee then, after an evaluation of the idea and if considered interest-
ing, the idea would be forwarded to the U.S. headquarters. The U.S. headquarters would
then make a decision regarding the new idea. In some cases, the decision of a national
voting among all the Swedish franchisees would take place, and then replace the evalua-
tion made by the committee. However, the final decision would still need to be made at
45
the U.S. headquarters. These new ideas will then be implemented to all the franchisees,
with some exceptions within marketing related issues, according to RS. S2 mentioned
an example with a meatball sandwich, where the managers voted for it, with a majority
of the managers being against it. This led to the meatball sandwich getting removed
from all the Subway restaurants. “They had to remove it completely so there won´t be
any collision, because it is a chain after all”, S2 said. However, sometimes different
campaigns occur with selected restaurants around Sweden. As an example, a campaign
offering a foot long sandwich for 55 SEK was launched at selected restaurants. The re-
gional managers asked S2 if he wanted to participate in this, something that he chose to
do, S2 said.
Thus, even though RS was keener to articulate Headquarters in Amsterdam as a final
recipient of a new idea, he was at the same time certain that new idea should go to U.S.
for the final decision. According to the article published in Franchise International
website Graham (2006), Headquarters in Amsterdam were established to manage
growth and supervise operations of European franchisees. A manager responsible for
customer service and communication in Amsterdam Headquarters did not give much in-
formation about the functions and the purpose of these headquarters.
Discussing the decision making process at Subway, S2 said that every decision came
from higher level managers “They decide it, we do it”, he said. When S2 wanted to
make any changes on his own within the restaurant, using opening hours and furniture
as examples, he first needed approval from the regional managers in Gothenburg, he
said. He added that no changes except the opening hours have been made within the res-
taurant during the last six months. S1 confirmed the need for approval with higher level
managers and said that he could not make any changes without contacting the develop-
ment agent/regional manager. “If a change would be made without the development
agent’s knowledge there would be problems”, S1 said. RS agreed and said that every-
thing should go through him. If changes would be made without his approval, it could
lead to serious consequences such as termination of the franchising contract. When
asked if the local managers would like to make any changes within Subway or if they
want more power in general, S1 only mentioned marketing. He added that if every local
manager had too much power all Subway restaurants would look different. It is impor-
46
tant for Subway to maintain control so that every restaurant looks the same, he contin-
ued. S2 mentioned that he had enough power over marketing and that it was more or
less up to him when it came to dealing with it. S2 also mentioned that even though he
did not have as much power as he could have had, he still had the amount of power that
he wanted.
Talking about decisions made by the headquarters, S1 had experienced some unneces-
sary and sometimes “picky” changes. The light in the storage room was not placed ac-
cording to the rules, S1 said. S1 wanted to install extra light in the restaurant, but in-
stead the light had to be installed in the storage room due to Subway´s policies, accord-
ing to S1. S2 also had experienced some unwanted situations and gave an example
about local coupons (Subway-coupons that were only valid at the restaurants in Jonkop-
ing). A decision was made regarding distribution of local coupons, S2 was against the
idea but chose to accept it in order to avoid any collision with the other restaurant and to
not irritate or confuse the customers, S2 said.
According to S2 he did not need to ask the regional managers about, since it was not in-
side the restaurant. Installing the sunshade, S2 contacted a company on his own, sent
them the Subway-logo and told them what color and size he wanted. When the regional
manager then discovered the sunshade and the “outside serving area” they liked it and
said that it was a good initiative, S2 said. S1 added that when it comes to outside, he
could do whatever he want, but only if the material required for the innovation came
from Subway. In addition, sometimes different campaigns occurred with selected res-
taurants around Sweden. As an example, a campaign offering a foot long sandwich for
55 SEK was launched at selected restaurants. The regional managers asked S2 if he
wanted to participate in this, something that he chose to do, S2 said.
Regional managers/development agent’s role in innovation process is to: (1) check if
franchisees are doing well and are complying to the standards and rules stipulated in
operations manual, (2) mediate the ideas from franchisees to the headquarters in U.S.
and Amsterdam, (3) participate in phone conferences and provide information about
news and changes within Subway as well as listen to the franchisee ideas and some-
times carry out voting process, (4) participate in annual meetings where regional man-
47
ager provides information about future deals or future financial figures, (5) communi-
cate frequently with franchisees through e-mails.
As mentioned before, food and marketing committees exists within Subway. According
to RS, these types of committees exist in every country. Committees deal with questions
regarding the food and is responsible for everything that is served in the restaurants, RS
said. Within these committees, elected representatives from the franchisees, together
with national managers will meet and discuss future changes and innovations together
with general thoughts and ideas, RS continued. RS said that if committees decided on a
great idea, they would need to contact the U.S. to reach their approval. If they said
“Yes” then committees would have the power to implement the decision in all franchi-
sees. However, RS also mentioned that if committees were not sure about the success of
the idea, they would present the arguments against it to the headquarters and ask them
for a permission to vote. If U.S. said “Yes”, then committees would initiate the voting
process among all the franchisees in Sweden, which was carried out in annual meetings.
RS continued saying that every single idea which was discussed within these commit-
tees came from the franchisees themselves. Some of these ideas are then voted for at
the regional/national meetings with the franchisees, according to RS.
S1 mentioned that if a franchisee got a place in this committee, he/she would pay lower
advertising fee.
RS said that almost every decision should reach U.S. headquarters approval. All the
ideas discussed in the food and marketing committees would have to go to U.S. for ap-
proval. AM said that “If a franchisee in any country comes up with an innovative idea,
we will encourage them to contact HQ with the idea”
48
5 Analysis
In the analysis, the authors will combine the theory and findings in order to extract as
much information as possible from the findings.
5.1 Max
5.1.1 Communication
After interviewing the managers in Jonkoping, an overview of the current situation ap-
peared relatively clear. Vertical communication existed on a satisfying level for the lo-
cal management. More communication could exist, however the managers did not feel
any need for it. Like in any other managerial position, the managers were expected to
take own initiative and make own decisions when it came to day-to-day operation. This
is all part of being a manager. Obviously, higher level management received updates
and acted as support to the local management when it came to larger decisions or future
changes. Within Max organization, a Board of Operation existed in order to control the
day-to-day operation, plan for future events and being responsible for the restaurants
themselves.
Figure. 2 Max communication schedule
---- = Non-personal communication
<-> = Two-way communication
Figure 2 illustrates the impression the authors got after interviewing the local manage-
ment in Jonkoping regarding the communication within the organization. Addressing
the owners directly was possible for the local management, however this was not rec-
ommended and should only occur in “worst case scenarios”. Therefore, this part has
been left out of the table.
49
1. Headquarters
The headquarters located in Lulea controls the entire organization and every major deci-
sion will take place here. The headquarters is responsible for the final result and
progress within Max.
2. Board of operations
The Board of operations controls day-to-day activities and the restaurant themselves.
Any change or innovation that affects the restaurants and their daily operation will be
decided here, however final decision and approval will come from the headquarters. The
Board of operations consists of regional managers together with staff closely connected
to the headquarters, which makes it easy to communicate with both higher and lower le-
vels in the organization.
3. Regional managers
All the Max restaurants are divided into regions, according to their geographical loca-
tion. The restaurants in a specific region will then share a regional manager, who will
work as a mediator between the local restaurants and higher level management. Smaller
decisions, that the local manager feel insecure about can be decided directly by the re-
gional manager.
4. Local manager
The local manager is responsible for his/her restaurant and employees. The local man-
ger controls the daily operation in the restaurant and works “on the floor” together with
the rest of the employees. The local manager also reports all statistical data regarding
the restaurant revenue and result to higher level management, together with being the
one responsible for the implemented innovation.
5. Intranet forum
Max has a company intranet that works as base for internal communication, or a web
that connects every layer within Max. Here the employees, local- and regional manage-
ment together with the headquarters can discuss everything that is on their mind. The
intranet is the recommended way of communication when non-urgent situations occur.
Additionally, the local management can discuss problems and situations with other
50
managers and co-workers, together with searching for existing solutions for a specific
problem. In this way, problems can get solved faster and smoother than via the personal
communication.
General horizontal communication between the restaurants was also perceived as good,
however it existed more locally. Not only were the employees aware of the other restau-
rants within the city, the employees of these restaurants met during leisure time and par-
ticipated in activities provided by Max. Work exchange also occurred between the res-
taurants when additional workforce was needed at a specific restaurant. Regional and
national meetings were also held regularly with all the managers at Max, where the
managers discussed larger changes and problems, talked about the future and gave each
other tips and support.
5.1.2 Power
Rubin (1978) stated that in order to maintain control over the brand, it is in the best in-
terest for the franchisor to demand uniformity among the chain. After interviewing the
local managers at Max, they all presented the same mindset. Even though Max is not a
franchise, it was still important for them to maintain control over the brand and that they
supplied the same food and service in all their restaurants. Even though local manage-
ment was not allowed to make major innovations or changes on their own, bringing new
ideas and suggestions to the table was highly appreciated.
Having power and influence over new changes was something that Wilson (2009) said
should be earned and that it takes time and experience. This was also the case within
Max. An experienced manager would have more influence and respect when it came to
new ideas and changes, than a new manager. Currently, one of the managers in Jonkop-
ing asked the more experienced manager in a different restaurant located in Jonkoping
for advice before contacting higher level management. Therefore, the more experienced
manager would have more (indirect) influence when it comes to new innovations and
changes within Max, than the less experienced manager.
New ideas and innovative thinking was also highly recommended when it came to mar-
keting, since the local management was responsible for marketing. This was something
that Baucus et al. (1996) said often was seen within franchisees. However, no individual
51
marketing was made by one single restaurant. All the Max restaurants in Jonkoping
worked together in order to market their restaurants and the brand. In order to increase
the motivation for innovative thinking, Shane (1994) suggested the presence of rewards
and product champions. No reward was recognized within Max, however everyone was
encouraged to share their ideas with higher level management.
According to Miller (1983) several entrepreneurial strategies can beneficially be used
within a company in order to be more innovative, such as pro-activity, propensity to
take some risk and promoting innovation. No incentives such as reward or promotion
was recognized within Max, however every employee had the opportunity to share their
thoughts and ideas with their managers and co-workers.
5.1.3 Roger´s diffusion of Innovation, at Max
Figure 3. This table illustrates the impression the authors got after interviewing the lo-
cal management in Jonkoping regarding the process of new innovation within the or-
ganization. Not every decision regarding a new innovation goes trough the Board of
Operation. However, in this case, innovation in form of a SST works as an example and
will represent the process of new innovation. (If the innovation is marketing-related, the
board of operation will then be replaced with the marketing department within the com-
pany etc.)
52
1. Knowledge
Knowledge regarding SST´s was noticeable during the interviews with all the local
restaurant managers. Everyone knew about SSTs, however no-one of them had in-
vestigated it further. Individually they had more or less knowledge about SST and
managers who did not currently used SST´s in their restaurant were familiar with the
concept from other restaurants.
2. Persuasion
The process of the individual actively seeking for information was not shown by the
local management being interviewed. Talking to a local manager who was very in-
terested in technology and innovation in general, he revealed that he did not put any
effort or thinking into work-related innovations or new technology. Neither of the
managers at the Max restaurants had really strived for getting a new innovation in
form of a SST. The manager at the restaurant who currently uses a SST said that the
SST was there when he became manager, but admitted that it was a great asset for
the restaurant. The managers in the restaurants without a SST were more or less
neutral towards a future implementation and said that there was no existing need for
it.
The Board of Operation on the other hand, actively searched for more information
when it came to innovations and other things that will improve the operation. The
Board of Operation then sorted out all relevant information in order to see if there
existed any interesting innovation that could be implemented in the restaurants. The
Board of Operation will then inform the headquarters about the innovation and pos-
sibilities of implementation.
3. Decision
After receiving information from the Board of Operation, the headquarters will then
decide whether the innovation will be rejected or accepted.
4. Implementation
When it comes to implementation, local management will have greater responsibili-
ty in the innovation process. Since the innovations are implemented in the local res-
53
taurants, the local management will be the ones in charge of the innovation after the
implementation. However, sometimes unnecessary changes have been made which
only seemed to complicate things. These changes had been implemented in the res-
taurant, analyzed by the local management and then fixed, modified or removed if
the local management felt a strong need for it. The implementation worked as a try-
out stage, where theoretical ideas and innovations suggested by the Board of opera-
tion and headquarters were tested in the local restaurant. If regarded “unnecessary”
or “complicated”, these changes could be taken away and operation would then be
changed to the original routine. However, when it came to some changes the local
management and employees had to accept the situation and continue their day-to-
day work according to the new changes.
Even though Max strived to make all their restaurant consistent, with every menu
and restaurant looking as similar as possible, some differences occurred. When it
came to new innovations, the restaurants located in Stockholm would be the ones
implementing the innovation first. If shown successful, the innovation would then
be implemented in other restaurants located around Sweden.
5. Confirmation
After receiving feedback from the local management, the headquarters would make
the final decision regarding the implementation. Local management felt that they
had some power over the final decision. They were free to speak about their though-
ts and opinions regarding the implementation process (see step 4). However, the fi-
nal decision was the headquarters to make and whether they had taken all local
management´s thoughts and opinions in to consideration was not known by the local
management.
5.1.4 Examination of previous research
By comparing the findings of this research with findings of Lewin-Solomons (1999),
mostly similarities occur. However, some minor differences regarding the first step of
Roger´s Diffusion of Innovation (Knowledge) was discovered. According to Lewin-
Solomons (1999), headquarters will be the main actors during the first three stages in
54
Roger´s Diffusion of Innovation. However, overall knowledge about innovation existed
in all layers within Max and the main actor when it came to persuasion was the Board of
operation. Even though there existed a strong connection between headquarters and the
Board of operation, the Board of operation would still be seen as an independent part
within the organization. In the last three stages, (Decision, Implementation and Confir-
mation) the process corresponds with the research of Lewin-Solomons (1999). Decision
regarding implementation together with final confirmation of the innovation will be
made by the headquarters. In between, the innovation will be implemented at the local
restaurants where the local managers will be the ones responsible for the operation and
provide feedback to the higher level management and headquarters.
5.2 Subway
5.2.1 Communication
When asked, both franchisee managers expressed issues regarding the communication
within Subway. Issues such as problem with reaching higher level management and un-
supportive development agents. However both of the franchisee managers felt that they
had a satisfactory communication and support from higher level management.
One of the important tools for franchisees to be able to communicate with higher level
management was the existence of an advisory council, according to Dane (1992), Dan-
dridge (1994) and Lewin-Solomons (1999). In the U.S., the SFOAC (Subway Franchise
Owners Advisory Council) represented the franchisees, together with collecting and
summarizing feedback, thoughts and opinions from the franchisees. This made it easier
and more efficient for the franchisees to influence the headquarters. No equivalent or-
ganization or council existed in Sweden, according to the local management. However,
one of the franchisees pointed out that one of the Swedish franchisee managers would
be elected as a representative for the franchisees. The view from the regional manager
differed. He claimed that two committees existed where franchisees had high influence
over two specific topics, marketing and food. The aim was to have a large portion of
franchisees representatives in both committees. However, due to lack of interest, the
food committee did not have that many franchisee representatives.
Even though one franchisee was aware of an election procedure of a franchisee market-
ing representative, no knowledge regarding the product committee was recognized. This
55
clearly confirmed the statement by the regional manager, who said that there existed a
lack of interest among the franchisees regarding food-related issues. Thus, it was evi-
dent, that franchisees did not utilize representative bodies to their fullest potential, there-
fore hindering the effective communication with higher level management.
Local management perceived emails as a one of the best communicational tools. They
happened frequently and specially served as a great tool for managers that felt more
“shy” communicate ideas in person.
During phone conferences all managers of south of Sweden were participating in the
discussion. In this way, franchisees could communicate their ideas to regional manager
and also share opinions between other restaurant managers. One of the franchisees men-
tioned that the best tactic was to be aggressive in these meeting so that franchisee ideas
would be better heard by the regional manager.
These two ways of communication served as complements for franchisee managers.
Franchisees could choose a way which best suited their needs and personality. Addi-
tionally if some managers failed to communicate their ideas and opinions during these
meetings, they always could use email communication in order to compensate for un-
successful phone conference.
56
Figure 4. Subway communication schedule
This figure illustrates how local managers perceived the internal communication within
Subway.
When asking the local managers how their ideas regarding innovations would get trans-
ferred up to higher level management most efficiently, some differences were noticed.
Both managers agreed that the first step would be to talk to the regional manager, how-
ever the communication could then take two different ways. One of the local managers
said that it would be forwarded to the European headquarters in Holland while the other
local manager said that it would go to the company headquarter in the U.S. When con-
fronting the regional manager, he said that contacting Holland would be recommended
way. However, it was not that clear. It is clear that there existed an amount of confusion
how franchisees and regional managers perceive communication patterns in “Subway”.
This confusion is not only apparent among franchisees, but also higher level manage-
ment. This might be explained by the fact that most of the communication takes places
between franchisees and regional managers, therefore the broader picture of communi-
cations becomes somewhat scattered.
An interesting finding was observed when interviewing the regional manager. He men-
tioned that Amsterdam headquarters would be the recommended recipient of a franchi-
see idea. However, when he was talking about where ideas should be forwarded after
57
committees agree on them, RS said “U.S.” without any hesitation. This just further con-
firms the fact that communication between managers in Sweden and top managers in
U.S. is less clear and consistent. Horizontal communication exists less frequently than
vertical. Meetings with the restaurant managers in South of Sweden together with addi-
tional phone conferences were the only signs of horizontal communication that was de-
tected within the company. Local collaboration was recognized as almost non-existent.
One manager once felt “forced” to agree on a marketing campaign initiated by the other
restaurant and the higher level management, in order to minimize the risk for irritated
and confused customers.
5.2.2 Rogers Diffusion of Innovation applied on Subway
This figure illustrates the impressions and findings the authors got after interviewing
the franchisees in Jonkoping regarding the process of medium-sized innovations within
the organization. These findings were then analyzed by using Rogers Diffusion of Inno-
vations and visually illustrated as seen below.
Figure 5. Rogers Diffusion on Innovation, applied on Subway.
Initially, a major innovation such as a SST acted as example for an innovation. Howev-
er, the franchisees were not familiar with these types of innovations and the implemen-
tation process. Therefore, in order to maximize the relevant data provided by franchi-
sees, the authors chose to shift example to a medium-sized innovation, in this case the
58
introduction of a new sandwich. Since both franchisees more easily could share their
views and experience on this topic.
1. Knowledge
Knowledge regarding medium-sized innovations existed within the franchisees. All the
franchisees were aware of these types of innovations since it was a natural part of their
daily operation. According to the regional manager and the communication manager in
Amsterdam (RS and AM) most of the innovations and creativity came from franchisees.
Thus mostly franchisees are responsible in the knowledge stage.
2. Persuasion
Franchisees were not actively participating in the persuasion stage and they did not
search for more information regarding these innovations. However, there exist two
types of committees within Subway: Food- and marketing committee. These commit-
tees included higher level management as well as franchisee representatives, which con-
tinuously discusses changes and ideas regarding medium-sized innovations related to
food and marketing. These committees received suggestions and ideas from franchisees
and investigated further into these. If the committees, after gathering relevant informa-
tion and carrying out the discussion, believe that an innovation could benefit all franchi-
sees, the committees would then act as a mediator and contact the U.S. headquarters.
When it came to issues that the committee felt uncertain about, or when additional
thoughts and opinions were needed, a voting among all the franchisees in Sweden took
place. The franchisees would then vote on if they supported the innovation or not. The
result would then be sent to the U.S. headquarters.
3. Decision
After being discussed in one of the committees, or voted for among all the franchisees,
the idea regarding a new innovation would be sent to the U.S. headquarters which
would make the decision.
59
4. Implementation
Due to the importance of consistency within the franchise, the innovations that got ac-
cepted by the headquarters had to be implemented in all the franchisees. Thus, the pow-
er would lie in U.S. headquarters, because franchisees would not have any power to re-
ject the innovation. However, some decisions could be accepted as “optional”. In
those cases, franchisees could choose either to implement the decision or not. Thus, in
this case franchisees would exercise power over implementation
5. Confirmation
After the implementation, U.S. headquarters would be informed of the implementation
and then confirm the innovation.
5.2.3 Examination of previous research
The innovation process regarding medium-sized innovations corresponds with the inno-
vation process conducted by Lewin-Solomons (1999). Knowledge regarding the me-
dium-sized innovations existed within all the franchisees and ideas regarding medium-
sized innovations always originated from the franchisees. These ideas would then reach
the Persuasion-stage, where committees were conducted with franchisees together with
higher level management. Decision and Confirmation were both controlled by the head-
quarters, however franchisees had the power to vote for some innovations that the
committee felt insecure about. The implementation itself was conducted within the fran-
chisees and even optional in some cases. Therefore, a slight modification from the view
of Lewin-Solomons (1999) was recognized while investigating the Diffusion of Innova-
tion within the franchise. A larger amount of franchisee´s formal power existed within
this study than in the previous research. However other than that, the two studies cor-
responded.
5.2.4 The three Processes of Innovation within Subway
Within Subway, three different versions of the innovation (and change) process, depend-
ing on the size and coverage of the innovation, were discovered by the authors. In order
to present these findings in such a clear and structured way as possible, the authors
created the following figure (Figure 6) that visually shows how these processes were
perceived by the authors.
60
Figure 6. The Three Processes of Innovation
1. International and/or major innovations
When signing a franchisee contract, the local manager accepts some constraints set by
the franchisor. Together with constraints mention by Dandridge (1994), such as estab-
lishment design, territory of service and products of sale, implementing other types of
own innovation would also be considered breaking the regulations. Decisions regarding
major innovations such as SST´s would therefore be made in the company headquarters,
and later forwarded to the franchisees through the higher level management in Sweden.
Strict guidelines and rules are provided from the headquarters and needs to be followed
to its fullest. This is in order to maintain consistency within the chain, which is of high
value for the company, according to Rubin (1978). However, nothing is mentioned in
the guidelines regarding the exterior setting outside the restaurant. This made it possible
for one of the local managers to install an “outside serving area” together with a sun-
shade on his own initiative. This was allowed even though it would be considered as a
significant, visual change that violated the regulations if implemented inside in the res-
taurant.
2. National medium-sized innovations
As mentioned by Gallouj (1994), there exist different types of innovations, such as arc-
hitectural innovations and modifications. Additionally, Sundbo, Johnston and Mattson
61
(2010) said in their research that innovations made by frantrepreneurs mostly were in
terms of incremental innovations. Findings from Subway correspond with the results
from Sundbo, Johnston and Mattson (2010), where a modification in terms of the re-
moval of a sandwich took place.
By looking at Rogers Diffusion of Innovation, applied on Subway (Figure 6), it is fair to
say that the individual local manager has more or less no power over implementing new
medium-sized innovations on their own. However seen as a union, the franchisees had a
greater amount of power, especially within food and marketing, due to the franchisee
representatives in the committees. Baucus et al. (1996) confirmed that this was common
within franchising and said that franchisees often were encouraged to innovative think-
ing, specifically within marketing and product development.
3. Minor changes
When it came to minor local changes, such as opening hours, local managers felt that
they had a greater amount of power. However the change had to be clearly motivated
and regional managers had to be informed and approve the change.
5.2.5 Individual Entrepreneurship
Even though Dandridge (1998), Furquim De Azevedo, (2010), Sundbo, Johnston and
Mattsson (2010) compared franchisees as independent entrepreneurs, both the local
managers in Jonkoping emphasized the importance of control from the headquarters. In
order to protect the brand and to certify that all the franchisees within the chain supplied
the same product, control from the headquarters was necessary. However, analyzing the
answers given by the local managers, they perceived to have different degree of power
within the innovation process.
As mentioned, Baucus et al. (1996), said that franchisees are encouraged to innovative
thinking, which was confirmed by one of the franchisees, S2. After installing an “out-
side serving area” on his own initiative, he received positive feedback from the regional
manager. This would provide the franchisee with the encouragement to be more entre-
preneurial, proactive and independent in future situations as well. Also, he did not hesi-
tate to contact the headquarters in the U.S when something could not be solved by the
regional managers. Additionally, he felt more or less in control when it came to market-
ing and perceived that he had the amount of power that he needed.
62
In contrast, studies by Bradach, (1997), Kaufman and Dant (1996) saw franchisees as
“controlled self-employees”, risk averse and that they were entering into franchising in
order to buy a secure job. This reflected the impression the authors got regarding the
other franchisee, S1. No initiative regarding new innovations was found. Instead, the
franchisee relied more on the regional manager’s suggestions and support rather than on
his own judgment. “If an implementation would be made without the headquarters
knowledge there would be problems” he said.
Thus, findings suggested that even if the headquarters imposed a great amount of con-
trol over the franchisees. Local management had some power over implementing inno-
vations and changes. Especially when seen as a union, they had their highest amount of
power over issues regarding marketing and food. Local changes made on the initiative
of local management also existed. However, it depended to a great extent on the mindset
of the local franchisee managers and if they were entrepreneurial and motivated to use
the power or not.
5.2.6 Control over franchisees
Bradach (1997) in his study of 5 fast food chains found that checkups on franchisees
were usually carried out on average once per year. However, in the “Subway” case, the
check-ups are more frequent, usually carried out every month to see if the restaurant is
following the rules and standards. In addition, the Regional manager said that commu-
nication between development agents and franchisees are carried out more in formal fa-
shion. Thus, in Subway case, franchisor imposes a lot of control over franchisees even
though the number of franchisees is very high and according to Bradach (1997) and
Lewin-Solomons (1999) they should be less controlled.
63
6 Conclusion
Here the conclusion of the authors will be addressed.
This study confirms previous research which saw franchisees as being “controlled self-
employees with encouragement to be innovative”. Innovational thinking existed to some
extent within the franchisees. However, constraints from the company headquarters li-
mited the possibility for innovation regarding the restaurant and its assortment. A larger
amount of power, especially within marketing and food, was discovered when seeing
the franchisees as a union. In comparison, managers in company-owned outlets were
more independent than franchisees, when dealing with minor changes.
Therefore, the authors of this thesis state that the effect of the innovation process has a
positive relationship with the amount of power distributed to the local management. I.e.
in areas where the local management had a greater amount of formal power, local man-
agement also had a greater amount of affect in the innovation process. However, these
areas differ depending on the organizational structure. Franchisees showed the highest
amount of power within medium-sized innovations, while managers of company-owned
outlets showed the highest amount of power within minor innovations.
When it came to effectiveness of communication, the managers in all the franchise and
company-owned outlets perceived being satisfied with the existing communication to-
wards regional management. However the authors of this thesis discovered that the effi-
ciency within the communication between local management and top level management
differed. Managers in company-owned outlets had a closer connection towards the top
level management, than the franchisees. Additionally, the authors discovered that com-
munication and collaboration that existed between the company-owned outlets were
lacking between the franchisees. Instead, franchisees acted individually and saw each
other as competitors. This led to unnecessary communication with higher level man-
agement taking place, with the consequence of higher level management being unable
to focus on the more important issues. By implementing more horizontal communica-
tion and collaboration between the franchisees, it is in the authors beliefs that the effec-
tiveness of the communication would be largely increased.
64
Therefore, the authors of this thesis state that even though the communication within
the two fast food restaurant chains were perceived as satisfying and overall efficient
among the local management, there exist an opportunity for improvements. Especially
within the franchise system where an increased local communication and collaboration
would lead to more efficient communication throughout the entire organization.
65
7 Discussion
Here the authors will discuss the research and topic further and additionally suggests
further research.
This thesis brings forward the role of the local management when it comes to the inno-
vation process. Previous research mainly focused on the franchise system, while this
thesis mainly focused on the role of the local management, including both franchisees
and company-owned outlets. From the findings in this thesis the authors believe that the
previous research on franchise organization can be applied to company-owned outlets as
well. Even though Max is fully company owned it shared many similarities with a fran-
chise system. Communication within the franchise lacked the efficiency that was
present within the company-owned organization. Although franchisees had a greater
amount of clear power regarding national, medium-sized innovations (especially within
marketing and food).
Possibly this could be affected by the size of the companies. Of course Max which only
operates in Sweden does not have the same issues regarding different cultures and coun-
tries that Subway has to deal with. Hence the communication and organizational struc-
ture in Subway should look more complicated than in Max. However the authors of this
thesis do not believe that Subway has reached their potential when it comes to commu-
nication.
By improve the horizontal communication, authors believe that the efficiency of the en-
tire internal communication within Subway will be improved.
By the authors own experience, efficient internal communication is one of the corner
stones of a successful operation. Regardless if it is a national fast food franchise or a ba-
chelor thesis within Business administration, efficient communication is something that
is just as important as obvious.
7.1 Suggestions for further research
As this thesis is conducted in Jonkoping, Sweden it includes two Subway-restaurants
and three Max-restaurants. Therefore it would be interesting to expand the research to
include a larger sample of restaurants. Additionally, Max is currently launching a fran-
66
chise-program in Norway. When this program has gained enough experience, it would
be interesting to replicate this study by using both company-owned outlets and franchi-
sees of Max.
Furthermore, research regarding the role of local management within a franchise could
be extended. The authors found a lot of research regarding franchise organizations;
however in a larger organization it can be easy to forget about the local aspect. It is the
local management and personnel who represents the company and deals with the ma-
jority of customer contacts. Hence it is the authors’ beliefs that the local management
would play a major role when it comes to innovation and entrepreneurial thinking.
67
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Appendix
71
Appendix 1
Questions for Max
General, operational questions
How long have you been working as manager at this restaurant/company?
What is your strength/weakness, in comparison with the other fast-food restaurants in Jonkoping?
How would you describe your relationship with the other Max restaurant in Jonkoping? (Competitors,
“teammate”, “just another restaurant”?)
Innovation
Where does the creative process usually come from? (From restaurant or from the headquarters?)
Do you have to call the managers or have their consent when you want to change even a slightest thing or
you have some independence over certain things?
Even if you know that you need headquarters consent, do you still feel that you could implement the in-
novation by yourself without angering the headquarters?
Has there been any innovation, changes recently in Jonkoping or Swedish Max in general
(within the last 6 months)? If so what and who made the decision regarding the changes?
Does Subway provide some rewards/opportunities to motivate you in order to come up with ideas for im-
provements? (ex. provide seminars, meetings, conferences, workshops, bonuses etc?)
Is there anything that you want to change within the restaurant if you had the power?
SSTs
Have you ever thought of implementing a SST, *explain SST*?
Would you regard an SST as a major change?
When making major changes within the restaurants, such as implementing SST´s, expanding the restau-
rants, new food etc. How does the decision making process normally looks/would look like?
Perceived power of restaurant managers
Have you ever thought that an un-necessary/negative change has been made within the restaurant, as a
demand from higher ground?
How did the process turn out? i.e what happend with the change, was it fully implemented?
Would you like to have more power over making decisions?
Do you think that will benefit the whole system or maybe only the Swedish franchise system?
How often are you in contact with your manager? (e-mail, phone-contact and personal contact)
Do you feel that your thoughts, opinions and ideas are taken seriously, when contacting the higher man-
agers?
Appendix
72
Do you feel that you get the support you want/need from the higher managers?
When it comes to buying equipment. Do you buy it through Max or own suppliers?
How exactly does the franchise concept work? Detailed with Max!
Are there any regional/national meetings (regularly), to discuss problems, new innovations etc?
Appendix
73
Appendix 2
Frågor till Max
Generella, verksamhetsfrågor
Hur länge har du jobbat som chef på den här restaurangen/företaget?
Vad anser du vara era styrkor/svagheter, in jämförelse med andra dem snabbmatsrestaurangerna i Jönkö-
ping?
Hur skulle du beskriva er relation med de andra Max restaurangerna i Jönköping? (Konkurrent, lagkam-
rat, bara en helt annan restaurang?)
Innovation
Var kommer vanligtvis den kreativa processen ifrån? (Från restaurangerna eller mer från huvudkontoret?)
Behöver du ringa högre chefer eller ha deras tillstånd när du vill göra även de minsta ändringarna eller har
du någon självständighet över vissa saker?
Även om du behöver huvudkontorets tillstånd, känner du att du fortfarande kan implementera innovatio-
nen utan att uppröra huvudkontoret?
Har det varit någon innovation eller generell ändring på senaste tiden i Jönköping eller Max i Sverige
(inom de senaste 6 månaderna)? Om så är fallet, vem/vilka gjorde beslutet om ändringen?
Erbjuder Max några belöningar eller möjligheter för att motivera er att komma på idéer för förbättringar?
(Ex. Erbjuder seminarier, möten, konferenser, verkstäder, bonusar etc.)
Är det något inom restaurangen som du skulle vilja ändra om du hade möjligheten?
SSTs
Har du någonsin tänkt på att implementera en SST, *förklara SST*?
Skulle du beskriva SST som en större ändring?
När beslut om större ändringar inom restaurangen, så som implementera SST’s, utöka restaurangens ut-
bud etc. Hur ser vanligtvis den processen ut/hur skulle den se ut?
Uppfattad makt av restaurang cheferna
Har du någonsin känt att en onödig/negativ ändring har gjorts inom restaurangen på order uppifrån?
Hur såg den processen ut? Vad hände med ändringen, blev den implementerad till fullo?
Skulle du vilja ha mer makt över beslutsprocessen?
Tror du att det skulle vara till fördel för hela Max i Sverige?
Hur ofta är du i kontakt med din chef? (e-mejl, telefonkontakt och personlig kontakt)
Känner du att dina tankar och idéer tas på allvar när du kontaktar högre uppsatta chefer?
Känner du att du får den support du vill ha/behöver från högre uppsatta chefer?
När det kommer till att köpa in utrustning/varor. Måste du köpa det genom Max eller egna leverantörer?
Hur funkar det inom Max?
Är det några regionala/nationella möten (återkommande), för att diskutera problem, nya innovation etc?
Appendix
74
Appendix 3
Questions for Subway
General, operational questions
How long have you been working as manager at this restaurant/company?
What is your strength/weakness, in comparison with the other fast-food restaurants in Jonkoping?
How would you describe your relationship with the other Subway restaurant in Jonkoping? (Competitors,
“teammate”, “just another restaurant”?)
Innovation
Where does the creative process usually come from? (From franchisees or more from the headquarters?)
Do you have to call the managers or have their consent when you want to change even a slightest thing or
you have some independence over certain things?
Even if you know that you need headquarters consent, do you still feel that you could implement the in-
novation by yourself without angering the headquarters?
Has there been any innovation, changes recently in Jonkoping or Swedish subways in general
(within the last 6 months)? If so what and who made the decision regarding the changes?
Does Subway provide some rewards/opportunities to motivate you in order to come up with ideas for im-
provements? (ex. provide seminars, meetings, conferences, workshops, bonuses etc?)
Is there anything that you want to change within the restaurant if you had the power?
SSTs
Have you ever thought of implementing a SST, *explain SST*?
Would you regard an SST as a major change?
When making major changes within the restaurants, such as implementing SST´s, expanding the restau-
rants, new subs etc. How does the decision making process normally looks/would look like?
Perceived power of franchisee owners
Have you ever thought that an un-necessary/negative change has been made within the restaurant, as a
demand from higher ground?
How did the process turn out? i.e what happend with the change, was it fully implemented?
Would you like to have more power over making decisions?
Do you think that will benefit the whole system or maybe only the Swedish franchise system?
How often are you in contact with your manager? ( email, phone-contact and personal contact)
Do you feel that your thoughts, opinions and ideas are taken seriously, when contacting the higher man-
agers?
Do you feel that you get the support you want/need from the higher managers?
Do you know about the existence of the advisory council in Subway.
Appendix
75
Do you think that this council is useful and does it help franchisees in Jonkoping or Sweden? Does it help
for your ideas to be heard?
When it comes to buying equipment. Do you buy it through Subway or own suppliers?
How exactly does the franchise concept work? Detailed with subway!
Are there any regional/national meetings (regularly), to discuss problems, new innovations etc?
Appendix
76
Appendix 4
Subway Ordering
1. Sub or Sallad
Even though Subway are known for their sandwiches , all their sandwiches can also be
made as a salad.
2. Bread
Subway in Sweden offers five different types of bread; Wheat, Sesame, Parmesan &
Oregano, Wholegrain and Honey oat.
3. Size
All their sandwiches can be ordered in two different sizes, 15 centimeter or 30 centime-
ter (footlong).
4. Extra
The opportunity to order extra chicken, extra cheese, bacon etc. And also decide if the
sandwich (or salad) should be warm or cold.
5. Vegetables
Decide what vegetables to put on the sandwich (or salad); lettuce, tomatoes, cucumbers,
pickles, peppers, olives, red onions and/or jalapeños.
6. Dressing
Subway in Sweden offers 10 different dressings that can be put on the sandwich (or sal-
ad). Together with salt and/or pepper.
7. Meal
If cookies, apples or chips should be added to the sandwich (or salad) together with a
drink.
(Subway.se, 27 mars 13.45)
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