Franchising: A Review and Avenues to Greater Theoretical Diversity
Abstract
As franchising has increased its visibility and impact on the business landscape, it has attracted the attention of a wide variety of researchers from different academic backgrounds. We draw together much of this research by juxtaposing the two key theories used to explain franchising, resource scarcity and agency theory, with the empirical findings regarding three key franchising constructs—franchise initiation, subsequent propensity to franchise, and franchise performance. We suggest that research emphasis needs to shift toward understanding why firms initiate franchising and how franchising impacts different types of organizational performance. We also find that extant research can benefit from additional theoretical diversity and thus we offer new propositions grounded in three theories not yet widely applied to franchising.
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Resource scarcity drives a firm to seek access to human capital and managerial resources.
“Resource scarcity drives a firm to seek access to human capital and managerial resources (Combs et al., 2004).”
From A systematic review of international franchising (2021) · cites this paper as Combs et al., 2004
Cites
Firm Resources and Sustained Competitive Advantage
Barney, J. (1991) · Journal of Management · doi:10.1177/014920639101700108 · Cited by 48,334 · see citing works
Knowledge of the firm, combinative capabilities, and the replication of technology
Kogut, B., & Zander, U. (1992) · Organization Science · doi:10.1287/orsc.3.3.383 · Cited by 12,939 · cited 2× · see citing works
“, Lafontaine, 1992). Storholm and Scheuing (1994) itemized several possibilities for opportunism by both parties.”
BackgroundComparative Economic Organization: The Analysis of Discrete Structural Alternatives
Williamson, O. E. (1991) · Administrative Science Quarterly · doi:10.2307/2393356 · Cited by 7,151 · see citing works
A Resource-Based Theory of the Firm: Knowledge Versus Opportunism
Conner, K. R., & Prahalad, C. K. (1996) · Organization Science · doi:10.1287/orsc.7.5.477 · Cited by 3,146 · cited 2× · see citing works
“According to resource-based theory, managerial discretion (Conner & Prahalad, 1996) and established organizational routines (Teece, Pisano & Shuen, 1997) allow managers to coordinate resources more efficiently within firms than across firms (Kogut & Zander, 1992).”
BackgroundStandardization and adaptation in business format franchising
Kaufmann, P. J., & Eroglu, S. (1999) · Journal of Business Venturing · doi:10.1016/s0883-9026(97)00097-9 · Cited by 332 · see citing works
Dant, R. P., & Nasr, N. I. (1998) · Journal of Business Venturing · doi:10.1016/s0883-9026(97)00040-2 · Cited by 168 · cited 1× · see citing works
“…conflict is inherent in the relationship because franchisors benefit from royalties tied to chain-wide sales whereas franchisees benefit from outlet profit, giving franchisors incentive to engage in programs that enhance sales at the expense of profits (Dant & Nasr, 1998; Spinelli & Birley, 1996).”
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Castañer, X., & Oliveira, N. (2020) · Journal of Management · doi:10.1177/0149206320901565 · Cited by 525 · see citing works
International franchising: A literature review and research agenda
Rosado-Serrano, A., Paul, J., & Dikova, D. (2018) · Journal of Business Research · doi:10.1016/j.jbusres.2017.12.049 · Cited by 401 · see citing works
Entrepreneurial orientation and the franchise system
Dada, O. (., & Watson, A. (2013) · European Journal of Marketing · doi:10.1108/03090561311306877 · Cited by 91 · see citing works
A systematic review of international franchising
Alon, I., Apriliyanti, I. D., & Henríquez Parodi, M. C. (2021) · Multinational Business Review · doi:10.1108/mbr-01-2020-0019 · Cited by 74 · see citing works
Hua, N., Hight, S., Wei, W., Ozturk, A. B., Zhao, X. (., Nusair, K., & DeFranco, A. (2019) · International Journal of Contemporary Hospitality Management · doi:10.1108/ijchm-02-2018-0168 · Cited by 28 · see citing works
- Authors
- Combs, J. G., Michael, S. C., & Castrogiovanni, G. J.
- Affiliations
- Florida State University (US)
- University of Illinois Urbana-Champaign (US)
- University of Tulsa (US)
- Corresponding author
- Combs, James G.
- Michael, Steven C.
- Castrogiovanni, Gary J.
- Venue
- Journal of Management
- Publisher
- SAGE Publications
- Published
- 2004-12
- Volume
- 30
- Issue
- 6
- Pages
- 907-931
- ISSN
- 0149-2063 (ISSN-L)
- 1557-1211
- OpenAlex
- W2032663979
- Cited by
- 450
- References
- 6
- Citations by year
- 2026: 11 · 2025: 14 · 2024: 17 · 2023: 18 · 2022: 16 · 2021: 27 · 2020: 21 · 2019: 18 · 2018: 25 · 2017: 35 · 2016: 19 · 2015: 23 · 2014: 33 · 2013: 27 · 2012: 25
- FWCI
- 22.45
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Management (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Franchising Strategies and Performance
- Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Entrepreneurship Studies and Influences
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Keywords
- franchising, resource scarcity theory, agency theory, franchise performance, organizational performance, theoretical diversity, propositions
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