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Opportunism, knowledge, and the performance of franchise chains

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  • Jérôme Barthélemy

Abstract

An important feature of most franchise chains is that they simultaneously use franchised and company‐owned outlets. In this study, I show that the relationship between the resources provided to outlet managers and the financial performance of franchise chains is contingent on their governance structure. Specifically, opportunism and knowledge considerations seem to prevent chains with a large proportion of franchised outlets from fully leveraging resources such as a valuable brand name and tacit business practices. On the other hand, brand name value and business practices tacitness are not directly related to the proportion of franchised outlets in chains. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Jérôme Barthélemy, 2008. "Opportunism, knowledge, and the performance of franchise chains," Strategic Management Journal, Wiley Blackwell, vol. 29(13), pages 1451-1463, December.
    • Handle: RePEc:bla:stratm:v:29:y:2008:i:13:p:1451-1463
    DOI: 10.1002/smj.719
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    Cited by:

    1. Itai Ater & Oren Rigbi, 2015. "Price control and advertising in franchising chains," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 148-158, January.
    2. Muriel Fadairo & Cintya Lanchimba, 2012. "Performance in distribution systems : What is the influence of the upstream firm's organizational choices ?," Working Papers halshs-00727382, HAL.
    3. Luo, Yadong & Liu, Yi & Yang, Qian & Maksimov, Vladislav & Hou, Jigang, 2015. "Improving performance and reducing cost in buyer–supplier relationships: The role of justice in curtailing opportunism," Journal of Business Research, Elsevier, vol. 68(3), pages 607-615.
    4. Eunkyung Lee & Ji-Hern Kim & Chang Seop Rhee, 2021. "Effects of Marketing Decisions on Brand Equity and Franchise Performance," Sustainability, MDPI, vol. 13(6), pages 1-15, March.
    5. Muriel Fadairo & Cintya Lanchimba & Josef Windsperger, 2015. "Network Form and Performance. The Case of Multi-Unit Franchising," Working Papers halshs-01128075, HAL.
    6. Anant Deshpande & David Tsai, 2021. "Managing a Mission-driven Franchise Organization: An Empirical Investigation of Organizational Practice and Individual Outcomes," Global Business Review, International Management Institute, vol. 22(2), pages 311-347, April.
    7. Zlatica Kavic & Mario Sercer, 2014. "Franchise Relationship: Franchisees’ Satisfaction," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 10, pages 77-84.
    8. Brookes, Maureen & Roper, Angela, 2012. "Realising plural-form benefits in international hotel chains," Tourism Management, Elsevier, vol. 33(3), pages 580-591.

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