There is a large and fragmented literature that examines the nature of franchising. This paper aims to collect all the empirical evidence on the factors that make franchising work and to integrate this evidence in a framework. A narrative synthesis was performed of 126 peer‐reviewed empirical journal articles. This review shows how the outcomes of franchising are determined by five major clusters of factors: ownership structure, business format design, contract design, behavior of the franchisor and the franchisee and their interaction, and the age and size of the system and its units. It identifies what franchisors and franchisees need to do to be successful and which evidence gaps and conflicting results remain. To yield better outcomes for both the franchisor and the franchisee, they should work on a recognizable brand name and a good working relationship; in addition, they should have suitable skills and attitudes as well as contractual exclusive territories. For further improvement of franchisee outcomes, high‐quality franchisor support, decentralized decision‐making, selection tools and fair contracts are essential. The effects of a high franchise proportion, active ownership, knowledge exchange and standardized operating instructions are contingent on other structural and contextual factors in the system. Conflicts and tying should be prevented. Hardly any research has been undertaken into which franchise designs are valued by customers. The authors have launched a research agenda for further research, from various theoretical perspectives, into the interactions between system elements, actors and contexts.

We conclude that franchising has the potential to improve outcomes in healthcare practices, but the evidence base is yet too weak for firm conclusions. Extensive research is needed to further determine the value of healthcare franchising in various contexts. We advocate more research in other healthcare sectors in both low- and middle-income countries and high-income countries, on more types of outcomes with attention to trade-offs, and on what factors produce those outcomes.

BackgroundBusiness format franchising is an organizational form that originates from the business sector. It is increasingly used in healthcare, being a promising organizational form for improving the competitiveness and efficiency of organizations, the quality of care, and the professional work environment. However, evidence is lacking concerning how these healthcare franchises should be designed to actually deliver the promised benefits. This study explores how the design of the central element in franchising, the business format (i.e., brand name, support systems, specification of the products and services), helps or hinders the achievement of positive results.MethodsA qualitative comparative embedded case study was conducted. The cases focused on three Dutch healthcare franchises providing mental healthcare, hospital care and care for the intellectually disabled. The data were collected through document analyses, observations, and 96 in-depth, semi-structured interviews with franchisors and unit actors (franchisees, unit managers, professionals). The interviews were recorded and transcribed verbatim. A conceptual model based on a systematic review of studies in other industries was used as an initial method for coding the data. New inductive codes were used to enrich and extend the analysis. The data were subjected to within-case and cross-case comparative thematic analyses.ResultsDifferent business format designs have different effects on results, as perceived by franchisors and unit actors. The analysis revealed how this variation in perceived effects can be explained by different dynamics with regard to system-wide adaptation, local adaptation, professionals’ resistance to change, ease of knowledge sharing, bureaucracy, overhead, uniform brand presentation, accelerating effects and reliable performance levels. The analysis resulted in a new typology of four types of business formats, showing how combinations of business format elements facilitate or hinder the achievement of different types of results.ConclusionsPractitioners using healthcare franchising as a model to improve client-related, strategic, organizational and professional results should carefully consider how to design their business format in order to facilitate the achievement of desired results. The developed typology can be used as a starting point for these practitioners and as a basis for future scholarly research. Further quantitative research is recommended to confirm the results.Electronic supplementary materialThe online version of this article (doi:10.1186/s12913-014-0485-5) contains supplementary material, which is available to authorized users.