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Franchise
Franchising: a literature review on management and control issues

Sofie Verbieren
Lessius – KU Leuven
Research Assistant Accounting
Lessius University College
Katholieke Universiteit Leuven
Department of Business Studies
Faculty of Business & Economics
Korte Nieuwstraat 33
Naamsestraat 69
2000 Antwerpen – Belgium
3000 Leuven - Belgium
E-mail: Sofie.Verbieren@econ.kuleuven.be
Phone: +32 16 32 65 47 or +32 3 201 18 74 - Fax: +32 16 32 67 32 or +32 3 201 18 42
Research interests: management accounting & control, interfirm relationships, franchising, service operations
Martine Cools
Associate professor at Lessius
Research Fellow of KU Leuven
Research Associate Rotterdam School of Management
Lessius - Associatie Katholieke Universiteit Leuven
Department of Business Studies
Korte Nieuwstraat 33
B-2000 Antwerpen, Belgium
Email: Martine.Cools@lessius.eu
Phone: +32/3/201.18.75 - Fax: +32/3/201.18.42
Research interests: management accounting and control in intra-firm and interfirm relationships Alexandra Van den Abbeele
Assistant Professor of Accounting
Katholieke Universiteit Leuven
Naamsestraat 69
3000 Leuven - Belgium
E-mail: alexandra.vandenabbeele@econ.kuleuven.be
Phone: +32 16 32 69 36 - Fax: +32 16 32 65 47
Research interests: management accounting and control

1

Franchising: a literature review on management and control issues

Abstract
This article provides an overview of the recent literature on franchising, with special attention to management control issues. Based on an analysis of franchising articles published in twenty-five high-impact journals over the period 1996–2008, the literature is divided into the following three broad streams: franchise initiation and subsequent propensity to franchise, franchise performance and control of franchising relationships. Several research gaps and avenues for future research are identified, especially towards a systematic study of management control issues in the context



References: Achrol, R. S. and Etzel, M. J., 2003, The Structure of Reseller Goals and Performance in Marketing Channels, Journal of the Academy of Marketing Science 31, 146 – 163. Alon, I., 2001, The Use of Franchising by US-based Retailers. Journal of Small Business Management 39, 111 – 122. Azoulay, P. and Shane, S. A., 2001, Entrepreneurs, Contracts and the Failure of Young Firms, Management Science 47, 337 – 358. Bates, T., 1998, Survival Patterns among Newcomers to Franchising. Journal of Business Venturing 13, 113 – 130. Baucus, D. A., Baucus, M. S. and Human, S. E., 1996, Consensus in Franchise Organizations: A Cooperative Arrangement among Entrepreneurs, Journal of Business Bradach, J. L., 1997, Using the Plural Form in the Management of Restaurant Chains. Brickley, J. A., 1999, Incentive Conflicts and Contractual Restraints: Evidence from Franchising, Journal of Law & Economics 42, 745 – 774. Brickley, J. A., 2002, Royalty Rates and Upfront Fees in Share Contracts: Evidence from Franchising, Journal of Law, Economics and Organization 18, 511 – 535. Brickley, J. A. and Dark, F. H., 1987, The Choice of Organizational Form: The Case of Franchising, Journal of Financial Economics 18, 401 – 420. Brickley, J. A., Misra, S. and Van Horn, R. L., 2006, Contract Duration: Evidence from Franchising, Journal of Law & Economics 49, 173 – 196. Bürkle, T. and Posselt, T., 2008, Franchising as a Plural System: A Risk-Based Explanation, Journal of Retailing 84, 39 – 47. Carney, M. and Gedajlovic, E., 1991, Vertical Integration in Franchise Systems: Agency Theory and Resource Explanations, Strategic Management Journal 12, 607 – 629. Castrogiovanni, G. J., Combs, J. G. and Justis, R. T., 2006a, Resource Scarcity and Agency Theory Predictions Concerning the Continued Use of Franchising in Multi-Outlet Castrogiovanni, G. J., Combs, J. G. and Justis, R. T., 2006b, Shifting Imperatives: An Integrative View of Resource Scarcity and Agency Reasons for Franchising, Castrogiovanni, J. G. and Justis, R. T., 2002, Strategic and Contextual Influences on Firm Growth: An Empirical Study of Franchisors, Journal of Small Business Management 40, Cochet, O., Dormann, J. and Ehrmann, T., 2008, Capitalizing on Franchisee Autonomy: Relational Forms of Governance as Controls in Idiosyncratic Franchise Dyads, Journal of Cochet, O. and Garg, V. K., 2008, How Do Franchise Contracts Evolve? A Study of Three German SMEs, Journal of Small Business Management 46, 134 – 151. Combs, J. G. and Ketchen, D. J., 1999, Can Capital Scarcity Help Agency Theory Explain Franchising? Revisiting the Capital Scarcity Hypothesis, Academy of Combs, J. G. and Ketchen, D. J., 2003, Why Do Firms Use Franchising as an Entrepreneurial Strategy?: A Meta-Analysis, Journal of Management 29, 443 – 465. Combs, J. G., Ketchen, D. J. and Hoover, V. L., 2004, A Strategic Groups Approach to the Franchising-Performance Relationship, Journal of Business Venturing 19, 877 – 897. Combs, J. G., Michael, S. C. and Castrogiovanni, G. J., 2004, Franchising: A Review and Avenues to Greater Theoretical Diversity, Journal of Management 30, 907 – 931. Contractor, F. J. and Kundu, S. K., 1998, Modal Choice in a World of Alliances: Analyzing Organizational Forms in the International Hotel Sector, Journal of Dahlstrom, R. and Nygaard, A., 1999, An Empirical Investigation of Ex Post Transaction Costs in Franchised Distribution Channels, Journal of Marketing Research 36, 160 – 170. Dant, R. P., 2008, A Futuristic Research Agenda for the Field of Franchising, Journal of Small Business Management 46, 91 – 98. Dant, R. P., Brush, C. G. and Iniesta, F. P., 1996, Participation Patterns of Women in Franchising, Journal of Small Business Management 34, 14 – 28. Dant, R. P. and Kaufmann, P. J., 2003, Structural and Strategic Dynamics in Franchising, Journal of Retailing 79, 63 – 75. Dant, R. P. and Nasr, N. I., 1998, Control Techniques and Upward Flow of Information in Franchising in Distant Markets: Conceptualization and Preliminary Evidence, Journal of Dant, R. P., Paswan, A. K. and Kaufmann, P. J., 1996, What We Know about Ownership Redirection in Franchising: A Meta-Analysis, Journal of Retailing 22, 429 – 444. Dant, R. P., Perrigot, R. and Cliquet, G., 2008, A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France and Brazil, Journal of Small Dekker, H. C., 2003, Value Chain Analysis in Interfirm Relationships: A Field Study, Management Accounting Research 14, 1 – 23. 2004 (2008). Desai, P. S., 1997, Advertising Fee in Business-Format Franchising, Management Science 43, 1401 – 1419.

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