The Dark Side of Franchising

Abstract

FRANK HOY IS DEAN OF THE COLLEGE OF Business Administration at the University of Texas at El Paso, USA. As editor of Entrepreneurship: Theory and Practice, he has studied the entrepreneurship/ franchise interface. The United States Congress and other legislative bodies have been enacting or considering laws regulating franchisor-franchisee relations. The various causes of legislative action suggest there is a dark side to franchising: problems between franchisors and franchisees that are often downplayed in the attention given to low failure rates and industry growth. A recently proposed theory of entrepreneurship may help explain the inevitability of conflict between the parties. In turn, the theory may suggest conflict resolution actions that may help solve the problems that arise.

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