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

Jacques Boulay, Barbara Caemmerer, Heiner Evanschitzky, Krista Duniach

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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.
Original languageEnglish
Pages (from-to)49-58
Number of pages10
JournalJournal of Business Research
Volume113
Early online date2 Apr 2020
DOIs
Publication statusPublished - 1 May 2020

Keywords

  • Franchise
  • Multi-unit franchising
  • Performance
  • Resource-based view
  • Transaction cost economics

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