Advanced Search
MyIDEAS: Login

Allocation of authority in franchise chains

Contents:

Author Info

  • Azevedo, Paulo Furquim de

Abstract

This article investigates the level of delegation in franchise chains, distinguishing the two most relevant franchisingmodels: Business Format Franchising and Learning Network Franchising. The two models basically differ on thelevel of real authority (effective control over decisions) exercised by the franchisors. Differences in businessfeatures, such as the required standardization, monitoring costs and consumer sensitivity to variations in productattributes (consumer measurement costs), explain the adoption of the different models of franchising. Thesevariables affect the trade-off between the risk of brand name loss and the gains in knowledge sharing and learningwithin the network. The higher the need for standardization, the higher is the risk of brand name loss, and,consequently, the more likely the franchisor will adopt an organizational design that confers more control overfranchisees’ decisions, such as business format franchising. This paper presents two case studies with Brazilian foodfranchise chains that illustrate the main argument and suggest additional propositions. Moreover, an empiricalanalysis of 223 franchise chains provides additional support to the hypothesis of a negative the effect of requiredstandardization on the level of delegation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://bibliotecadigital.fgv.br/dspace/bitstream/10438/6893/1/TD%20262%20-%20Paulo%20Furquim%20de%20Azevedo.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil) in its series Textos para discussão with number 262.

as in new window
Length:
Date of creation: 19 Jul 2010
Date of revision:
Handle: RePEc:fgv:eesptd:262

Contact details of provider:
Postal: Rua Itapeva, 474, 13o andar, CEP 01332-000, São Paulo - SP
Phone: 55 (011) 3799-3350
Fax: 55 (011) 3799-3357
Email:
Web page: http://eesp.fgv.br
More information through EDIRC

Related research

Keywords:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fgv:eesptd:262. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Núcleo de Computação da EPGE).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.