Maria Jell-Ojobor and Josef Windsperger
The governance structure of international franchise firms varies from higher control modes, such as wholly owned subsidiaries and joint venture franchising, to lower control…
Abstract
Purpose
The governance structure of international franchise firms varies from higher control modes, such as wholly owned subsidiaries and joint venture franchising, to lower control modes, such as area development and master franchising. Based on organizational economics, strategic management, and international business perspectives, the purpose of this paper is to use the case study analysis to empirically evaluate an integrative model on the franchisor’s choice of international governance modes.
Design/methodology/approach
The study applies qualitative methods, such as in-depth case analysis, to investigate a large set of variables that influence the governance structure decision of the international franchise firm. Specifically, it applies a theory-testing case study with two major competitors in the European automotive rental industry, i.e. Europcar and Sixt. Theory-testing case research is justified by the lack of explanatory research due to the complexity of the franchisor-franchisee relationship phenomena, such as the factors that influence the franchisor’s choice of international governance modes. The investigation of the complex governance structure phenomenon requires a holistic analysis.
Findings
The case study shows that environmental, behavioral, transaction-specific, resource-based (system-specific, market-specific, financial resources), and international strategy considerations are important determinants of the governance mode decision of the international franchise firm.
Research limitations/implications
The study responds to the recent call in organizational economics, marketing, strategic management, and international business literature to develop and test a multi-theoretical framework to explain the governance structure of inter-organizational networks, such as franchise networks.
Originality/value
Few previous studies in international franchising have used more than one theoretical perspective to explain the governance structure of the international franchise firm. This study contributes to the theory-testing case study literature by applying a rigorous method of conducting case research. This includes developing a theoretical framework and a systematic research design. A systematic research design requires a holistic analysis by investigating the international franchise governance modes from a variety of theoretical perspectives which are the organizational economics, strategic management, and the strategy-structure perspective.
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Marko Grünhagen, Maria Jell-Ojobor, Julia E. Hess and Haroldo Monteiro da Silva Filho
This research links the global advance of the franchise model to the geohistorical foray of shopping malls through an empirical longitudinal study in the largest emerging market…
Abstract
Purpose
This research links the global advance of the franchise model to the geohistorical foray of shopping malls through an empirical longitudinal study in the largest emerging market in Latin America, Brazil.
Design/methodology/approach
We conducted an analysis of a multi-year set of qualitative interviews with the same franchised mall tenants (23 interviews in 2017 and 12 follow-up interviews in 2022) via an iterative procedure of transcript data coding and theme identification.
Findings
Shopping malls were key catalysts in the pre-pandemic growth of franchising in Brazil, yet during the pandemic, malls became liabilities. Attitudes towards malls as franchise hosts changed, flipping the mall perception from catalytic host to burdensome trap. Mall management companies, as key gatekeepers, deserve more research attention.
Originality/value
Our study reveals the detrimental role shopping malls, with their static rules and high cost structures, have played as franchise businesses struggled to survive during the global pandemic. While franchising represents one of the most influential retail business models today, shopping malls have been among the most important brick-and-mortar retail institutions since the 1950s. Jointly, they constitute a unique retail symbiosis with little attention in the academic literature.
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Cesario Armando Flores Villanueva, María del Carmen Gaytán Ramírez and Aleida Núñez García
This article examines the influence of market opportunity, risk, and distance on the choice of destination country for Mexican franchises.
Abstract
Purpose
This article examines the influence of market opportunity, risk, and distance on the choice of destination country for Mexican franchises.
Design/methodology/approach
The research hypotheses are developed under the theoretical approaches of institutional theory, agency theory, and transaction costs theory and were contrasted on the data obtained from 52 Mexican international franchisors operating in 37 countries as of 2016. This study uses linear regression with ordinary minimums using the STATA 13.1 software.
Findings
The results reveal that a larger market size, a greater level of economic freedom, and a smaller geographic distance are determining factors in the choice of destination country. No statistical significance was found in the variables GDP per capita, level of democracy and cultural distance.
Originality/value
This research contributes to the theoretical and practical field. On the theoretical side, this study integrates institutional theory, agency theory, and transaction cost theory to evaluate the factors of the destination country that influence the internationalization process of the franchise. Another contribution of this study is to apply theories and models of developed economies to the process of internationalization of franchises in an emerging economy. Additionally, this study is based on a model that considers the distance, opportunities and risks that are considered by Mexican franchisors in the selection of the international markets in which they maintain operations. This study contains important practical implications that can serve as relevant information for decision-making in the franchise sector and its internationalization. This data is valuable for new models of Mexican franchises that decide to start their internationalization process.