FRANCHISING DREAMS: The Lure of Entrepreneurship in America

Business professor Birkeland finds ample evidence that franchisers and those who purchase an outlet from them both believe in the American dream of entrepreneurship, with its promise of independence and wealth. His research into everyday franchise operations, though, reveals a slew of differences between the two sides that can cloud that dream. Studying King Cleaners, Sign Masters and Star Muffler (three large pseudonymous franchises) over a four-year period, Birkeland interviewed franchisers and franchisees and worked at individual shops for hands-on experience. The problem, he says, arises when franchisees confuse ownership with entrepreneurship. Since delivery of a uniform service or product under a franchise license creates an overriding interest for control in franchisers, owners of franchises are not free to run their businesses as they wish; in fact, the last thing franchisers want is people tinkering with their formula. When an owner later bristles at corporate control and insists on independence, Birkeland states, the relationship between franchiser and franchisee can become a "battle of wills." Birkeland found limited freedom in the franchises he studied; often, hopes for wealth and financial security dissolved as owners worked long hours simply to survive. Despite these challenges, the number of franchises is expanding. (Birkeland estimates that one out of every 16 people employed in the U.S. works for a franchise, and approximately one-third of the gross domestic product flows through franchises.) He discerns a pattern to franchisee success: those adept at sales and networking thrive and the most successful franchises are those that manage to build trust between franchiser and franchisee. This is an articulate, illuminating and lively work. (June 1)

Forecast:The popularity of Barbara Ehrenreich's Nickel and Dimed and Eric Schlosser's Fast Food Nation should generate review and media attention for Birkeland's book. Like them, he pulls back the curtain to reveal the gritty reality in a growing sector of retail America.