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Microfranchising value perception and structural elements

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  • Pedro Lucas de Resende Melo
  • Felipe Mendes Borini
  • Julio Araujo Carneiro da Cunha

Abstract

A microfranchise requires investment of up to R$ 50 mil. There are currently 336 franchise chains operating in this format in Brazil. The importance of this type of business is justified by lower income classes' increased purchasing power. However, it is a franchise model that has not been extensively studied. The purpose of this article is to identify whether there are differences between conventional franchises and microfranchises related to value perception and structural elements of the franchise system. This means assessing whether conventional franchises differ from microfranchises in regards to franchisees' perception of support value and perceived brand value. We analyzed 1090 conventional chains and chains which operated through microfranchising using data published during the period 2007-2012. Additionally, we performed three case studies with microfranchisees. OLS regression showed that there are differences in the perception of franchise brand value and but not in the perception of support to the franchisee.

Suggested Citation

  • Pedro Lucas de Resende Melo & Felipe Mendes Borini & Julio Araujo Carneiro da Cunha, 2014. "Microfranchising value perception and structural elements," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 18(3), pages 328-350.
    • Handle: RePEc:abg:anprac:v:18:y:2014:i:3:1038
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