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This paper analyzes factors determining contractual completeness in franchising. We argue that completeness is affected by firms' contract design capabilities along with different contractual hazards. Our results support these hypotheses by showing that experienced franchisors draw up more complete contracts. Additionally, we observe that the effects of contractual hazards on completeness are not always positive and direct. There may be also a substitution effect between formal and relational governance mechanisms because risks of bilateral expropriations might serve as a mutual guarantee. This interaction also suggests that contract analysis must not only focus on particular clauses but also on the contract as a whole.

Purpose-The aim of this paper is twofold. On the one hand, it intends to analyze the influence of human capital and social capital on the second of the stages in the process of entrepreneurial creation established by Shane and Venkataraman (2000), the discovery of opportunities for creating a business. Secondly, it aims to analyze the existence of gender differences both in the discovery of opportunities and in the stock of human and social capital possessed by men and women. Design/ methodology/approach-We use data from the GEM Spanish Project (2009). From a random sample of 28,888 individuals, which is representative of the whole of the Spanish population between the ages of 18 and 64, the opinion of 1,473 active entrepreneurs has been gained. Also, we used logistic regressions as a statistical method to test the hypotheses proposed. Findings-The results indicate that individuals possessing a greater stock of human capital as well as those who are highly involved in broad social networks discover more chances of business creation. Similarly, this work shows that men discover more business opportunities and possess more human and social capital than women. Research limitations/Implications-The results obtained allow us to make a contribution to the literature about the influence that human and social capital exerts on the discovery of entrepreneurial opportunities. Regarding to gender, the main contribution of the work is that gender differences exist both in the discovery of opportunities and in the stocks of human and social capital possessed by individuals. The main limitation of the paper is the difficulty of directly measuring variables used and thus the need to use "proxy" variables. Practical implications-The results of the paper can help politicians and educators to enhance endeavours to increase attention to human and social factors and gender differences in order to develop the second of the stages in the process of entrepreneurial creation, the discovery of opportunities for creating a business. Originality/Value-In line with the findings and research implications, this study provides additional proofs of why gender differences exist with regard to the entrepreneurial process, in part related with differences in human and social capital. However, the study shows that other factors apart from the different stocks of human and social capital could explain this phenomenon, so a new line of research is necessary.

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Acknowledgments:This paper has benefited from the support of the Spanish Ministry of Economy and Competitiveness (MINECO-13-ECO2013-40407R). Prior Interactions and Contractual Completeness in Spanish FranchisingPrior interactions between partners had led authors to emphasize the importance of relational contracting in interfirm relationships. We discern two learning effects from prior interactions (about the partner and about the transaction) to show that formal contracting is ubiquitous in franchising. Using a sample of 74 contracts from SME Spanish franchises, our results indicate that experienced franchisors complete their contracts more, always introducing more contingencies, even those relating to their own obligations. Furthermore, franchisor's reputation does not only not reduce the degree of completeness regarding the franchisor's obligations, but increases the franchisees' obligations. These findings suggest, first, that franchisors prefer formal contracting because it is feasible and affordable for them and signals their commitment to the chain in a more credible way and, second, that formal and relational contracting do not seem to work as substitutes. We conclude that formalization is always necessary to enforce franchise agreements, regardless relational contracting.efficiently structure their agreements (Reuer and Ariño 2007;Ryall and Sampson 2009; Vanneste and Puraman 2010). Parties learn from each other and therefore develop a mutual understanding, shared values and normative conventions that define how they will work together (Poppo, Zheng and Li 2016, p. 726). They mainly generate knowledge about the partner's behavior, familiarity and interorganizational trust. This is what some authors call knowledge-based trust (Yamagishi and Yamagishi 1994), and others relational trust (Ring 1996;Poppo et al. 2016). All these create an "expectation that alleviates the fear that one's exchange partner will act opportunistically" (Bradach and Eccles 1989, p.104), facilitating the use of relational governance mechanisms (Gulati 1995;Zollo, Reuer, and Singh 2002;Gulati and Nickerson 2008).However, this relevance of relational contracting does not seem to hold in all kinds of interorganizational agreements, among which franchising is an example. Franchising is a type of interfirm relationship in which a firm, the franchisor, grants the right to use its brand and a proven business concept to legally independent firms, the franchisees, under certain conditions and in exchange for financial compensation (entry fee and royalties). Some empirical evidence suggests that, in franchising, formal contracting is the main instrument for enforcing the relationship between franchisor and franchisees (Brickley and Dark 1987; Solís and González 2012), even when they have already renewed their contract several times. Why is relational contracting not the basis for franchising? More generally, there is another type of prior interaction to which the literature on interfirm relationships has paid hardly any attention. This is whe...

The aim of this paper is to identify differences in contract design between successful and less successful franchise chains. Comparing contracts from both groups of companies, we observe, on the one hand, that (1) franchise contracts are unbalanced irrespective of the chain's success: contracts cover franchisees' obligations more than franchisors' obligations. On the other hand, we find that (2) contracts in successful franchise chains are more complete (i.e. cover a larger number of contingencies) than the less successful ones and (3) this difference lies in the contingencies regarding franchisees' obligations, which are more fully covered in the contracts of more successful chains. More specifically, within the contingencies regarding franchisees' obligations, (4) successful chains restrict the franchisee decision rights more frequently on day-to-day business operations than on financial conditions or post-contractual contingencies. These findings can be explained because successful chains are more sensitive to franchisees' opportunistic behavior, because they have learned how to manage and solve any potential conflicts, or because of differences in bargaining power. Finally (5) franchisors' obligations are not statistically different between groups, which we interpret as evidence that relational contracting mechanisms do not substitute formalization.

This paper focuses on franchise contract design, identifying different provisions to be included in contracts and testing the contractual heterogeneity in the number of provisions across chains. Analyzing 74 Spanish franchise contracts, we identify 157 different provisions and document notable differences in contract design. Furthermore, we observe that franchise agreements are unbalanced: contracts cover franchisees' obligations more than franchisors' obligations. This asymmetry can be explained because franchise contract is the basic tool for the franchisor to attenuate franchisees' opportunism. However, franchisees may use alternative safeguards such as franchisor reputation. Finally, we also observe that there are provisions that modify others, changing their literal meaning. Given that such interactions have hardly been studied, more research is needed to measure how they modify parties' rights and obligations.