Searching for a dynamic view of franchising

Abstract

This paper suggests a new perspective of franchising networks. We start from the limitations of what we have called the traditional management literature about franchising and look at the current research about franchising and the recent advances in the Economics of the Organisation, in order to propose a Capabilities View of Franchising Networks. From this perspective, we suggest that the emergence of franchising networks may be seen as a kind of dynamic arrangements, which seek to combine the franchisor’s and franchisee’s partly idiosyncratic capabilities. Franchisees are seen as heterogeneous as they can and often hold different knowledge and experiences. Hence, they may be an important source of dynamic capabilities for the franchising network. Thus, in contrast to traditional approaches, a Capabilities Approach emphasises the processes of creating, transmitting and coordinating productive knowledge. Analysing franchising from this perspective may also help us to understand the plural form by linking their existence and dynamics to previous experiences and commitments with a particular system, including the investments made in inter-firm relationships and the need to preserve a degree of variety within the franchise network