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Multi-unit franchising from franchisor and franchisee perspectives: Antecedents, performance outcomes, and the optimal mini-chain size

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  • Boulay, Jacques
  • Caemmerer, Barbara
  • Evanschitzky, Heiner
  • Duniach, Krista

Abstract

We assess in an integrated model the antecedents of multi-unit franchising as well as its outcomes. Based on both franchisor and franchisee data, the results related to the antecedents of multi-unit franchising are explained by the resource-based view of the firm and transaction cost economics. Furthermore, our study demonstrates that multi-unit franchising leads to positive franchisor consequences in the short term but negative outcomes for multi-unit franchisees. Owning more than three units leads to a significant drop in sales and profits per unit. These findings show that the supposed positive link between multi-unit franchising and franchisor and franchisee outcomes is not linear and thus challenges the idea that multi-unit franchising creates a win-win situation for the system and the individual franchisees.

Suggested Citation

  • Boulay, Jacques & Caemmerer, Barbara & Evanschitzky, Heiner & Duniach, Krista, 2020. "Multi-unit franchising from franchisor and franchisee perspectives: Antecedents, performance outcomes, and the optimal mini-chain size," Journal of Business Research, Elsevier, vol. 113(C), pages 49-58.
    • Handle: RePEc:eee:jbrese:v:113:y:2020:i:c:p:49-58
    DOI: 10.1016/j.jbusres.2020.02.029
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