Opportunism, knowledge, and the performance of franchise chains

Jérôme Barthélemy

198 citations0/0 files storedStrategic Management Journal

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Franchising Strategies and Performance Innovation and Knowledge Management Business Strategy and Innovation

Abstract

Abstract An important feature of most franchise chains is that they simultaneously use franchised and company‐owned outlets. In this study, I show that the relationship between the resources provided to outlet managers and the financial performance of franchise chains is contingent on their governance structure. Specifically, opportunism and knowledge considerations seem to prevent chains with a large proportion of franchised outlets from fully leveraging resources such as a valuable brand name and tacit business practices. On the other hand, brand name value and business practices tacitness are not directly related to the proportion of franchised outlets in chains. Copyright © 2008 John Wiley & Sons, Ltd.

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References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1991Firm Resources and Sustained Competitive Advantage 2004Firm resources and sustained competitive advantage 1984A resource‐based view of the firm 1983Separation of Ownership and Control 1996Toward a knowledge‐based theory of the firm 1976Markets and Hierarchies: Analysis and Antitrust Implications.1997The Tacit Dimension

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2011Franchising Research Frontiers for the Twenty-First Century 2011Microfranchising in Base–of–the–Pyramid Markets: Institutional Challenges and Adaptations to the Franchise Model 2014Improving performance and reducing cost in buyer–supplier relationships: The role of justice in curtailing opportunism 2016A Model of Entrepreneurial Autonomy in Franchised Outlets: A Systematic Review of the Empirical Evidence 2013Making Franchising Work: A Framework Based on a Systematic Review 2016The Joint Effects of Ex Ante Contractual Completeness and Ex Post Governance on Compliance in Franchised Marketing Channels

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