Abstract
This paper provides insight on how conflicts in hybrid business organizations can arise effecting performance of the organization. To investigate this, a study of the relationship between franchisors and franchisees is presented where franchisors' view is given. The study shows that it indeed is both art and science of the strategy of the franchisers to keep the b2b relationship sustaining and flourishing. The study included responses of 124 franchisors from the United Kingdom. It also utilizes validation interviews from 8 academics, franchisors and practitioners. We suggest that the franchisor - franchisee relationship is the ultimate expression of hybrid relationships. The results show that the franchisor strategy on power greatly depends on franchisee behavior and the exercise of the power by the stronger party may vary accordingly. The results also show that the size and age of the franchise system greatly affect the use of power strategy. The prevalence of conflicts between the two partners also negatively impact the whole franchise system. The conflicts also trigger the change in the future plans of the franchisor and these may be related to numerous areas of the business. It is also evident that the accruing strategy is different and dynamic at each stage of the life cycle and according to the size of the firm.