Evolution in franchising: Trends and new perspectives

Abstract

The Singer Company established a network of resellers for sewing machines. Nowadays franchising is one of the fastest developing forms of business in the world. The evolution of theories that seek to explain franchise systems have been published in academic journals from time to time, but until now there was not a study that have established a social network analysis to quantify the degree of centrality and cohesion of the relationship between the main authors, journals, methods and theories in franchise. Therefore, the main purpose of this study is to extend the knowledge about franchising through an extensive research on its main theoretical perspectives into relevant international academic journals, showing the evolution of the field, highlighting the principal issues, authors and methods. Through a selection of 130 articles ranging from 1966 to 2015 the study investigates five relevant theories in franchising: (1) Resource Acquisition Theory, (2) Agency Theory, (3) Transaction Cost Analysis, (4) Signaling Theory, and (5) Property Rights Theory. A descriptive statistical analysis was done in order to identify the main authors and trends with the most used associated theories in franchise papers. The findings show agency theory and signaling theory, and resource scarcity theory as the main perspectives used in studies about franchising, but other perspectives have been increasing its presence, mainly the institutional theory and resource based-view perspective. The main dependent and independent variables cover a wide range of constructs, but ownership, performance, age, size, growth, geographical dispersion, and internationalization have been the most cited.

La franquicia: de la inversión al emprendimiento

“…Las condiciones para acceder al modelo de franquicia han evolucionado desde su origen (Varotto y Silva, 2017), y están migrando de un enfoque de inversor o tradicional a uno de emprendedor. El inversionista busca generar rentabilidad, sin importar el tipo de negocio o su conocimiento de este (De Bondt, 1998), por lo que, en el enfoque tradicional, el franquiciador busca solvencia económica en las personas interesadas y el inversor espera obtener una rentabilidad sobre su capital.…”

Accounting of Franchising Activities of Tourist Enterprises of Ukraine

“…This is primarily due to the active implementation of the practice of franchising in small businesses in the United States in the 60s. For a long time, this business model has remained leading for businesses in many sectors of the economy, including the restaurant industry and tourism (Bunea-Bontas and Petre, 2009;Czakon, 2012;Varotto and Aureliano-Silva, 2017;Rosado-Serrano et al, 2018;Elango, 2019;Alon et al, 2021;Ghani et al, 2021).…”

Critical Success Factors of Franchising Firms: A Study on Franchisors and Franchisees

“…This theory assists in putting into practice the numerous governance systems to manage the agents' behavior in jointly owned enterprises (Panda and Leepsa 2017). There are at least two methods for coordination: in the market, the price system suggests the most efficient allocation of resources, and in the firm, the authority (entrepreneur) is in charge of resource reallocation under the hierarchy principle (Varotto and Aureliano-Silva 2017).…”

“…A fundamental requirement of a businesses' survival is their ability to efficiently produce the products that customers demand at the lowest possible cost. According to the agency theory's principles, efficiency is correlated with managing agency issues (Varotto and Aureliano-Silva 2017). Although franchising can replace the requirement for supervision, there may be expenses to the franchisors involved.…”

“…Conflict over the ownership of a limited product is implied by the term "scarcity". Franchising would benefit a franchisor mainly during the early years when basic resources such as financial capital, suitable locations, the labor supply, and managers to apply the system would be required to adopt and develop the business concept and create economies of scale (Varotto and Aureliano-Silva 2017).…”