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Whither franchising? The case of Avis Europe PLC

  • Lowell R. Jacobsen

    (Baker University, Kansas, USA)

Registered author(s):

    This case study of Avis Europe PLC examines the diminished role of franchising in the vehicle leasing firm's achievement of market dominance in Europe. Market maturity, industry consolidation, adoption of centralised, efficiency-oriented technologies, and strategic alliances are the principal factors in accounting for the decline in the reliance on franchisees for local entrepreneurship and market expansion. Though many theories of franchising find at least some support in this study, the life cycle or ownership redirection explanation proves particularly compelling. Copyright © 2004 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/mde.1183
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    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 25 (2004)
    Issue (Month): 8 ()
    Pages: 525-535

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    Handle: RePEc:wly:mgtdec:v:25:y:2004:i:8:p:525-535
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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    1. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
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    6. Martin, Robert E, 1988. "Franchising and Risk Management," American Economic Review, American Economic Association, vol. 78(5), pages 954-68, December.
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    8. Thompson, R. Steve, 1994. "The franchise life cycle and the Penrose effect," Journal of Economic Behavior & Organization, Elsevier, vol. 24(2), pages 207-218, July.
    9. Scott E. Masten, 2002. "Modern Evidence on the Firm," American Economic Review, American Economic Association, vol. 92(2), pages 428-432, May.
    10. Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
    11. Niman, Neil B, 1991. "The Entrepreneurial Function in the Theory of the Firm," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(2), pages 162-76, May.
    12. 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 503-26, October.
    13. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-40, September.
    14. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
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