Dual Distribution and Intangible Firm Value: Franchising in Restaurant Chains

Srinivasan, R.

doi:10.1509/jmkg.70.3.120

Cited by 131 publications

(111 citation statements)

References 75 publications

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“…() found that franchisors gain more financially in plural forms. Srinivasan () found this only to be true for some franchisors. For certain chains, intangible value is unaffected, and small chains may even experience weaker financial performance if they also have high financial liquidity and a lasting advertising strategy (Srinivasan ).…”

Section: Results: a Framework Of Factors Related To Outcomes Of Francmentioning

confidence: 99%

“…Srinivasan () found this only to be true for some franchisors. For certain chains, intangible value is unaffected, and small chains may even experience weaker financial performance if they also have high financial liquidity and a lasting advertising strategy (Srinivasan ). All three studies considered the same outcome, industry and country; however, the study by Srinivasan was conducted earlier and used a larger sample and study period than the study by Koh et al .…”

Section: Results: a Framework Of Factors Related To Outcomes Of Francmentioning

confidence: 99%

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Making Franchising Work: A Framework Based on a Systematic Review

Nijmeijer

Fabbricotti

Huijsman

2013

Int J Management Reviews

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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.

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Section: Results: a Framework Of Factors Related To Outcomes Of Francmentioning

confidence: 99%

Section: Results: a Framework Of Factors Related To Outcomes Of Francmentioning

confidence: 99%

Making Franchising Work: A Framework Based on a Systematic Review

Nijmeijer

Fabbricotti

Huijsman

2013

Int J Management Reviews

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“…Garg (2013) focused on the drivers of differentiation, and our article complements that work by explaining the drivers of the other generic competitive advantage for MUF, low cost. Therefore, they are likely to advertise more in those marketing channels that have lower threats from free riding (Srinivasan, 2006). While the choice of industry may be one variable that explains success or failure of franchising systems (Garg, 2005a), the choice of appropriate organizational form may be another crucial variable.…”

Section: Discussionmentioning

confidence: 99%

A Theoretical Explanation of the Cost Advantages of Multi-unit Franchising

Garg

Priem

Rasheed

2013

Journal of Marketing Channels

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We advance franchising research by explaining the important role, so far overlooked, of different franchising forms in developing lowcost competitive advantage. We analyze the most meaningful cost drivers for franchising systems: economies of scale, reduced transaction costs, economies of learning, reduced monitoring costs, standardization, and relative bargaining power. Our analysis suggests that asymmetrical cost effects are likely for franchisors and franchisees. For franchisors, relative to single-unit franchising (SUF), multiunit franchising (MUF) should yield lower costs from scale economies and monitoring, higher costs from bargaining power, and similar costs from learning economies and standardization. For franchisees, lower costs for MUF are indicated from scale economies and standardization but not for monitoring. Within MUF, comparisons between area development franchising (ADF) and incremental franchising suggest that ADF yields lower costs from scale economies and learning economies for the entire system, but monitoring and standardization only reduce costs for their franchisees. Implications for practice and research are discussed.

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“…Restaurant chains often serve as the empirical setting of these studies (e.g. Bradach, 1992Bradach, , 1997Sorenson & Sorenson, 2001;Srinivasan, 2006). In this article we have examined pharmacy chains rather than restaurant chains.…”

Section: Discussionmentioning

confidence: 99%

“…Similar to Sorenson & Sorenson (2001) and Srinivasan (2006), we also study the performance implications of the plural form. A distinction is made between two types of performance: the performance of chain operators (i.e.…”

Section: Introductionmentioning

confidence: 99%

The Added Value of the Plural Form: Evidence from Dutch Pharmacy Chains

Duijvis¹,

Peelen²,

Montfort³

et al. 2013

IJMS

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Most empirical work on governance decisions focuses on explaining a firms' choice among governance structures. Nevertheless, in practice very different governance structures often exist side by side. The simultaneous use of different governance structures for the same function is referred to as the "plural form". The synergistic benefits of the plural form have been highlighted by only a number of research works. We will add to the body of knowledge by studying the plural dynamics in the pharmaceutical industry. We will show the chain operator's contribution to the performance in pure and plural forms, for both company owned and franchised outlets. Further, we will open the black box and show how horizontally and vertically the interactions between franchisees, company outlets and the chain operator support the realization of potentially conflicting strategic objectives of local responsiveness and standardization. We will take the perspective of the chain operator, being responsible for the development of the plural dynamics within the organization.

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Dual Distribution and Intangible Firm Value: Franchising in Restaurant Chains

Cited by 131 publications

References 75 publications

Making Franchising Work: A Framework Based on a Systematic Review

Making Franchising Work: A Framework Based on a Systematic Review

A Theoretical Explanation of the Cost Advantages of Multi-unit Franchising

The Added Value of the Plural Form: Evidence from Dutch Pharmacy Chains

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