Toward a relational perspective of franchising chains
In many professional and services industries, firms try to scale up their operations by reproducing practices in new locations through franchising arrangements, especially business format franchising. The classic but still prevailing explanations for franchising related phenomena, especially the initiative of franchising, the propensity to franchise, and the franchise performance, are mostly based on two orders of reasons (or a combination of them): franchising is either explained as a means to deal with resource scarcity or (and) as a mechanism for franchisor and franchisee to align incentives between themselves. However, empirical studies have shown limited support for both such claims, especially in face of the so called plural form, where proprietary and franchised units of the same franchisor co-exist. It may also be argued that the traditional literature on franchising has assumed a high level of homogeneity within and between franchising “networks,” possibly due to the perception that they tend to be “dominated” by a high level of standardization and replication of practices, both operative and relational. However, learning processes in such “networks” have recently been brought in as an attempt to capture other mechanisms that may underlie their operation and sustainability. This article seeks to explore a third perspective to look at franchising “networks,” by drawing from the literatures on capabilities and industrial networks. Seen from this perspective, business format franchising may involve more than the mere replication or exploitation of a recipe, especially if we take into consideration the partly idiosyncratic nature of both the relationships between actors and their capabilities and intentions. Within this perspective, variety preservation, and not only uniformity, may be recognized by participants as relevant for the performance of the franchise chain. In other words, variety may reflect the need for the refinement of the “package” throughout time, in more than one ways, together with the gradual development of the network and the learning experiences that take place in that context. Copyright Springer-Verlag 2009
Volume (Year): 3 (2009)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: http://www.springer.com|
Web page: http://www.panpacificbusiness.org/
|Order Information:||Web: http://www.springer.com/business/journal/11628|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Norton, Seth W, 1988. "An Empirical Look at Franchising as an Organizational Form," The Journal of Business, University of Chicago Press, vol. 61(2), pages 197-218, April.
- Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 141-161, Spring.
- Langlois, Richard N & Foss, Nicolai J, 1999.
"Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization,"
Wiley Blackwell, vol. 52(2), pages 201-218.
- Richard N. Langlois & Nicolai J. Foss, 1996. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," Working papers 1996-02, University of Connecticut, Department of Economics.
- Richard N. Langlois & Nicolai J. Foss, 1997. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," DRUID Working Papers 97-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Brian J. Loasby, "undated".
"The Organisation of Capabilities,"
Working Papers Series
96/6, University of Stirling, Division of Economics.
- Minkler, Alanson P., 1990. "An empirical analysis of a firm's decision to franchise," Economics Letters, Elsevier, vol. 34(1), pages 77-82, September.
- James A. Brickley & Frederick H. Dark & Michael S. Weisbach, 1991. "An Agency Perspective on Franchising," Financial Management, Financial Management Association, vol. 20(1), Spring.
- Brian J. Loasby, 2001. "Industrial Dynamics Why Connections Matter," DRUID Working Papers 01-09, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Mathewson, G Frank & Winter, Ralph A, 1985. "The Economics of Franchise Contracts," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 503-526, October.
- Martin, Robert E, 1988. "Franchising and Risk Management," American Economic Review, American Economic Association, vol. 78(5), pages 954-968, December.
- Dant, Rajiv P. & Gundlach, Gregory T., 1999. "The challenge of autonomy and dependence in franchised channels of distribution," Journal of Business Venturing, Elsevier, vol. 14(1), pages 35-67, January.
- Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
When requesting a correction, please mention this item's handle: RePEc:spr:svcbiz:v:3:y:2009:i:1:p:15-30. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.