Does Franchising Create Value? An Analysis of the Financial Performance of US Public Restaurant Firms

It is commonly believed that the franchising method of distribution provides strategic and operational benefits to the companies that adopt it. These benefits should result in superior financial performance as compared to that of firms that do not use franchising. Yet, the empirical evidence of the effects of franchising on financial performance is sparse and mixed. The purpose of this article is to examine the empirical evidence of the impact of franchising on US publicly traded restaurant firms. The results provide some evidence that franchising firms create more market and economic value than do non-franchising firms in the US public restaurant sector.     

Franchise partner selection decision making

This paper aims to investigate international franchise partner selection from the perspective of different decision making models and analyse the influence of organisational factors on the franchise selection decision making. Empirical data were collected from a leading international hotel group through multiple data collection methods. The research findings indicate that the participant organisation mainly exploits a processual approach to decision making. Power over the decision making shifts to different levels where the necessary information can best be accumulated and interpreted in different stages of the process. Different organisational parameters interact and exert influence upon each other while a franchise organisation decides to choose the most appropriate franchise partner.     

How passive ownership restrictions affect the rate of franchisee failure

What variables influence the adoption of passive ownership restrictions in franchise systems and what are the effects of these restrictions on the rate of franchisee failure of such systems? This article shows how standard performance models that do not account for self-selection of these contractual decisions can improperly suggest a negative relationship between the adoption of passive ownership restrictions and a performance outcome of franchise systems – the rate of franchisee failure. However, models that do account for self-selection of these restrictions indicate that these contractual decisions per se do not affect such a performance outcome. The findings also show that franchise systems with misaligned passive ownership restrictions show a higher rate of franchisee failure than their better-aligned counterparts.     

Franchisee Associations: Strategic Focus or Response to Franchisor Opportunism

This article examines some of the antecedents, processes, and effects of independent franchisee associations (IndFAs) and the reactions of franchisors to their organization. Specifically, we draw on various literatures to pose propositions relating to the following research questions: (a) Are there fundamental differences between associations whose focus is based on disagreements relating to strategic actions of the franchisor and those whose focus is perceived opportunistic behavior on the part of the franchisor? (b) Does the way these IndFAs are treated by the franchisor—after inception—affect members' identification with the group and/or franchisor? (c) Does the existence of a franchisee advisory council influence the willingness of a franchisor to legitimize an IndFA? (d) How does the size of the IndFA influence identification? We then present a conceptual model and use two illustrative examples from the business literature to explore our propositions.     

A Knowledge-Based Explanation of Franchise System Resources and Performance

The knowledge-based view (KBV) holds that the knowledge that an organization possesses is its most important strategic resource. Despite how important the adequate use of knowledge is to franchise system success, the KBV has yet to guide many franchising studies. The most important principle of KBV is to recognize system-wide resources through the eyes of knowledge-based resources. Using two separate secondary data sets, we examine the relationships between the knowledgeable employment of system resources and system performance. Empirical results reveal consistent support for our hypotheses. The ensuing discussion focuses on the implications of our findings.     

Deriving Meaning for Social Franchising From Commercial Franchising and Social Enterprise

Auntie Anne's Pretzels, the American Red Cross, and IKEA are franchises for a social benefit, but are they social franchises? There is a diversity of perceptions of what is meant by the term social franchising but no consensus on the precise meaning. Given that social franchising is a relatively new area of research and that a crucial first step in research on any topic is to define its parameters, this article derives a set of indicators for the phenomenon of social franchising by bringing together three strands of scholarship: social franchising, commercial franchising, and social enterprise.     

A Note on Franchising and Wage Bargaining

A franchising contract relocates distributable rent between franchisor and franchisee. With decentralized wage bargaining relocation modifies the position of the union in the wage bargaining. If the rent is relocated to the franchisor completely, then even a strong union is not able to raise wage above reservation level in the franchisee's firm. If franchisor and franchisee negotiate on rent division, there is an incentive to increase the franchise fee at the expense of the union. Therefore the overall rent assigned to labor depends on the differences of labor intensity in the franchisor's and franchisee's firms. Firm owners may be able to transfer distributable rents from a firm with a strong union to one with a weak union. Furthermore, a franchising contract shows a first mover advantage. A franchising contract is placed before wage bargaining, benefiting the franchisor.     

Franchisors' disclosure duty: market transparency and franchisee protection

The franchisee is usually the most vulnerable part of the franchise relationship, and should therefore receive greater protection from the legal framework. In this regard, the franchisor's pre-contractual disclosure duty has evolved in its legal status. Whereas its original purpose was to ensure transparency in the market, it now serves to protect the franchisee. In this paper, we compare the franchisor's obligations established by the legal framework in Spain with those set out in the Model Law drawn up by The International Institute for the Unification of Private Law.     

Brand equity heterogeneity among strategic groups in service franchising

Independent franchisees work cooperatively with service franchisors to strengthen the franchisor's brand name. However, agency theory predicts that franchisor inputs such as brand names and operational routines might be harmed by franchisees' free riding. In addition, previous literature has addressed the issues of strategic group emergence and performance differences between groups in recent decades. Thus, this study builds upon an emerging symbiotic view of franchising behind agency theory and incorporates a strategic groups level of analysis to investigate whether franchisees have strong incentives to maintain standards as franchisor seeking market penetration. By investigating potential brand equity differences among service franchisors for Taiwanese telecommunications service chains, this study found that different strategic groups exist in service franchising chains. From replication testing, the current results demonstrate that service franchising brand equity heterogeneities exist among franchisors within and across strategic groups. Therefore, this study broadens agency theory's explanation of service franchising.     

论特许经营中知识产权的滥用与规制

特许经营是21世纪国际经济贸易的主要商业经营模式。特许经营的核心是包括商标、专利、商业秘密等知识产权以及产品经销权、经营模式所构成的特许权的使用许可,特许人以此对被特许人进行持续的监督、控制。而知识产权本身是一种合法的垄断权,常常被滥用而引起限制竞争的效果。西方主要国家均对特许经营进行反垄断法规制,而且立法日趋严格,对我国具有借鉴意义,我国应建立完善以反垄断法为核心的法律体系,用以规制特许经营中的知识产权滥用行为。