Examining Control and Autonomy in the Franchisor-Franchisee Relationship
Abstract
This article examines the franchisor-franchisee relationship from two theoretical perspectives - agency theory and exchange theory. Taking the case of the fast-food industry in Israel, the research focuses on control and autonomy in a domestic hamburger chain - Burger Ranch - and two international chains - McDonald's and Burger King. The findings led to the design of a model that illustrates several aspects, such as the concept of franchising, the size and age of the chain, and the range of the contract, that relate to control and autonomy. The combination of agency theory and exchange theory enables us to focus on control and autonomy as multidimensional concepts, and to present various possibilities for judiciously balancing them. The case indicates that in some respects (e.g. master franchisee), the two global chains are more similar to each other than to the domestic chain. However, in other respects (e.g. size, growth rate), the domestic and one of the two global chains show more similarities than differences. The findings indicate different forms of integration of control and autonomy in the three chains.
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Large chains tend to provide greater autonomy to their franchisees.
“Large chains tend to provide greater autonomy to their franchisees (Pizanti and Lerner, 2003).”
From A systematic review of international franchising (2021) · cites this paper as Pizanti and Lerner, 2003
Cites
Standardization 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 10× · see citing works
“Though the use of restrictive control may cause conflicts (Dant and Nasr, 1998), conflicts do not necessarily culminate in termination of the exchange; they may end with the creation of a new balance between the parties (McGinty, 1998).”
BackgroundInfluentialInternational franchising: Capabilities and development
Fladmoe-Lindquist, K. (1996) · Journal of Business Venturing · doi:10.1016/0883-9026(96)00056-0 · Cited by 138 · see citing works
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International hotel development: A study of potential franchisees in China
Xiao, Q., O’Neill, J. W., & Wang, H. (2008) · International Journal of Hospitality Management · doi:10.1016/j.ijhm.2007.10.006 · Cited by 78 · 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
- Authors
- Pizanti, I., & Lerner, M.
- Affiliations
- University of Haifa (IL)
- Tel Aviv University (IL)
- Venue
- International Small Business Journal: Researching Entrepreneurship
- Publisher
- SAGE Publications
- Published
- 2003-05
- Volume
- 21
- Issue
- 2
- Pages
- 131-159
- ISSN
- 0266-2426 (ISSN-L)
- 1741-2870
- OpenAlex
- W1971069445
- Cited by
- 115
- References
- 3
- Citations by year
- 2026: 1 · 2025: 2 · 2024: 3 · 2023: 5 · 2022: 2 · 2021: 7 · 2020: 7 · 2019: 3 · 2018: 6 · 2017: 10 · 2016: 6 · 2015: 5 · 2014: 11 · 2013: 9 · 2012: 5
- FWCI
- 6.51
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- International Small Business Journal Researching Entrepreneurship (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 › Business Strategy and Innovation
- Keywords
- franchisor-franchisee relationship, franchising, autonomy and control, agency theory, social exchange theory, fast food industry, McDonald's, Burger King, franchise agreements
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