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This chapter presents a description on the nature of work franchisees perform at Star Muffler. Mark Spinelli, Star Muffler's chief executive officer, faced the monumental task of transforming “car guys” into managers. Star Muffler has a lack of differentiation among service providers and a poor industry image. To improve the image and consistency of the shops, Spinelli started a new program to rate shops on cleanliness and other factors. The profitability of each franchise unit and the relationship between franchisees has been changed by Spinelli's new customer oriented strategy. In general, the warranty system, the image and maintenance program, and the focus on customer satisfaction has made some effect in altering the old practices of Star Muffler, and the increased market share and customer loyalty can be attributed to them.

This chapter examines three basic components that are features of all franchise systems: royalties, trademarks, and long-term contracts. It demonstrated how these components function and, in particular, how they impact franchisee survival rates at King Cleaners, Sign Masters, and Star Muffler. Competition among franchisees changes the value of the trademark. It is noted that the prices for services given by Star Muffler is a major source of contention among franchisees. Franchisees and franchisors agree that the royalty is a “right” of the company, the price for their expertise, and assumed to be an operating expense for franchisees. The long-term nature of contracts is one of the defining characteristics of franchising, and it is an aspect of the strategy that seems to serve franchisors and franchisees well. Furthermore, it is believed that the short-lived tenure of franchisees is surely due to something other than contracts, trademarks, and royalties.

This chapter introduces a typology of franchisees that cuts across King Cleaners, Sign Masters, and Star Muffler. The three types of franchisee include neo-franchisees, disillusioned franchisees, and sideliners. Neo-franchisees are outspoken critics of the franchisor and with good reason: most neo-franchisees are successful in the business. They also have full confidence in their abilities and have no doubts that they would be successful as franchisees. Disillusioned franchisees largely believe that buying a franchise was the worst decision they ever made. Sideliners are in some respects the stable backbone of the system. Sideliners are not difficult to manage compared to neo-franchisees and disillusioned franchisees. There are common experiences and uncertainties that led these franchisees to be more alike than dissimilar. Regardless of their profile, franchisees work long hours, operate six or seven days a week, and rarely take vacations.

Franchising has become one of the dominant methods for distributing goods and services in the Western economy. It is an effective solution to the organizational problem of control since there are economic incentives in place to bind franchisee and franchisor to the trademark. In line with this, this book's author participated in the frontline operations of franchisees in three companies, referred to by the pseudonyms of King Cleaners, Sign Masters, and Star Muffler. Then, preformed structured interviews and network analysis with franchisees and with the CEO and other senior executives of each company. It is noted that franchise companies have the problems of having to sell franchise units and provide services to franchisees. Furthermore, this book present a sociological understanding of franchising both to those familiar with the strategy as franchisees or franchisors as well as to those who are familiar with it only as consumers.