Is bigger better?

Abstract

This paper explores from a US perspective two size‐related issues that may motivate aspiring franchisees to consider multi‐unit franchising as a superior alternative to the traditional single‐unit approach. First, one of the reasons for multi‐unit franchising might be the enhanced influence opportunity upon the franchisor’s decision making that arises from owning multiple outlets. Second, a potential franchisee may be interested in engaging in multi‐unit franchising in the anticipation of scale efficiencies, i.e. efficiencies that arise because of the size of the operation. The managerial relevance of the discovered issues and their potential for future research is outlined.

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