IDEAS home Printed from https://ideas.repec.org/p/ags/uerssr/278686.html
   My bibliography  Save this paper

Franchising and Rural Economic Development: Perspectives on Possible Effects

Author

Listed:
  • Dandridge, Thomas C.
  • Falbe, Cecilia M.
  • Dupuis, E. Melanie

Abstract

Studies of organizational type in rural entrepreneurship have concentrated on independent vs. branch establishments. Franchising is a third organizational alternative that is growing dramatically in the retail and service sectors. Franchising entails an agreement by the owner (franchisor) to grant to a franchisee the right to use a name and business format in return for an initial fee and sales royalties. Theories of business organization indicate that franchising may reduce the risk of firms planning to locate outlets in rural areas. As a consequence, franchises may become more popular in the rural consumer and producer service sectors. The actual effect of franchising on rural service enterprises is not clear. Franchises may simply replace many local businesses, or they may offer new services not previously available. Most government and private business databases do not distinguish franchises as a separate organizational category.

Suggested Citation

  • Dandridge, Thomas C. & Falbe, Cecilia M. & Dupuis, E. Melanie, 1993. "Franchising and Rural Economic Development: Perspectives on Possible Effects," Staff Reports 278686, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278686
    DOI: 10.22004/ag.econ.278686
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/278686/files/ers-report-583.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.278686?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Klein, Benjamin & Saft, Lester F, 1985. "The Law and Economics of Franchise Tying Contracts," Journal of Law and Economics, University of Chicago Press, vol. 28(2), pages 345-361, May.
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    3. Martin, Robert E, 1988. "Franchising and Risk Management," American Economic Review, American Economic Association, vol. 78(5), pages 954-968, December.
    4. Brickley, James A. & Dark, Frederick H., 1987. "The choice of organizational form The case of franchising," Journal of Financial Economics, Elsevier, vol. 18(2), pages 401-420, June.
    5. Stone, Kenneth E. & McConnon, James C., 1982. "The Effect Of Shopping Centers On Host Towns And Outlying Areas," 1982 Annual Meeting, August 1-4, Logan, Utah 279191, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Howard E. Aldrich, 1990. "Using an Ecological Perspective to Study Organizational Founding Rates," Entrepreneurship Theory and Practice, , vol. 14(3), pages 7-24, April.
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. Max S. Wortman, 1990. "Rural entrepreneurship research: An integration into the entrepreneurship field," Agribusiness, John Wiley & Sons, Ltd., vol. 6(4), pages 329-344.
    9. Rubin, Paul H, 1978. "The Theory of the Firm and the Structure of the Franchise Contract," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 223-233, April.
    10. Max S. Wortman, 1990. "A unified approach for developing rural entrepreneurship in the US," Agribusiness, John Wiley & Sons, Ltd., vol. 6(3), pages 221-236.
    11. David N. Allen & David J. Hayward, 1990. "The Role of New Venture Formation/Entrepreneurship in Regional Economic Development: A Review," Economic Development Quarterly, , vol. 4(1), pages 55-63, February.
    12. Mathewson, G Frank & Winter, Ralph A, 1985. "The Economics of Franchise Contracts," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 503-526, October.
    13. Christian H. Gladwin & B. F. Long & Emerson M. Babb & D. Mulkey & D. J. Zimet & A. Moseley & L. J. Beaulieu, 1989. "Rural Entrepreneurship: One Key to Rural Revitalization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(5), pages 1305-1314.
    14. Anderson, Evan E., 1984. "The growth and performance of franchise systems: Company versus franchisee ownership," Journal of Economics and Business, Elsevier, vol. 36(4), pages 421-431, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Falbe, Cecilia M. & Welsh, Dianne H. B., 1998. "NAFTA and franchising: A comparison of franchisor perceptions of characteristics associated with franchisee success and failure in Canada, Mexico, and the United States," Journal of Business Venturing, Elsevier, vol. 13(2), pages 151-171, March.
    2. Garg, Viany K. & Rasheed, Abdul A., 2003. "International multi-unit franchising: an agency theoretic explanation," International Business Review, Elsevier, vol. 12(3), pages 329-348, June.
    3. Norton, Seth W., 1995. "Is franchising a capital structure issue?," Journal of Corporate Finance, Elsevier, vol. 2(1-2), pages 75-101, October.
    4. Fladmoe-Lindquist, Karin, 1996. "International franchising: Capabilities and development," Journal of Business Venturing, Elsevier, vol. 11(5), pages 419-438, September.
    5. González-Díaz, Manuel & Montoro-Sánchez, Ángeles, 2011. "Some lessons from incentive theory: Promoting quality in bus transport," Transport Policy, Elsevier, vol. 18(2), pages 299-306, March.
    6. Francine Lafontaine & Kathryn L. Shaw, 2005. "Targeting Managerial Control: Evidence from Franchising," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 131-150, Spring.
    7. Itai Ater & Oren Rigbi, 2007. "Price Control In Franchised Chains: The Case Of McDonald's Dollar Menu," Discussion Papers 06-022, Stanford Institute for Economic Policy Research.
    8. Scott Shane, 2001. "Organizational Incentives and Organizational Mortality," Organization Science, INFORMS, vol. 12(2), pages 136-160, April.
    9. Jindal, Rupinder, 2011. "Reducing the Size of Internal Hierarchy: The Case of Multi-Unit Franchising," Journal of Retailing, Elsevier, vol. 87(4), pages 549-562.
    10. Michael, Steven C., 1996. "To franchise or not to franchise: An analysis of decision rights and organizational form shares," Journal of Business Venturing, Elsevier, vol. 11(1), pages 57-71, January.
    11. Jell-Ojobor, Maria & Windsperger, Josef, 2014. "The Choice of Governance Modes of International Franchise Firms — Development of an Integrative Model," Journal of International Management, Elsevier, vol. 20(2), pages 153-187.
    12. Cozzarin, Brian P. & Barry, Peter J., 1998. "Organizational Structure In Agricultural Production Alliances," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(2), pages 1-17.
    13. Shane, Scott A., 1996. "Why franchise companies expand overseas," Journal of Business Venturing, Elsevier, vol. 11(2), pages 73-88, March.
    14. Williams, Darrell L., 1999. "Why do entrepreneurs become franchisees? an empirical analysis of organizational choice," Journal of Business Venturing, Elsevier, vol. 14(1), pages 103-124, January.
    15. Knott, Anne Marie & McKelvey, Bill, 1999. "Nirvana efficiency: a comparative test of residual claims and routines," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 365-383, April.
    16. Manuel González & Benito Arruñada & Alberto Fernández, 1997. "La decisión de subcontratar: el caso de las empresas constructoras," Investigaciones Economicas, Fundación SEPI, vol. 21(3), pages 501-521, September.
    17. Josef Windsperger, 2003. "Complementarities and Substitutabilities in Franchise Contracting: Some Results from the German Franchise Sector," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(3), pages 291-313, September.
    18. Antonio Navarro García & Enrique Carlos Díez de Castro & Francisco Javier Rondán Cataluña, 2006. "Franchisor Types In Portuguese Franchising," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(2), pages 97-114.
    19. Barthelemy, Jerome, 2004. "The administrative productivity of U.S. franchisors: an empirical investigation," Economics Letters, Elsevier, vol. 83(1), pages 115-121, April.
    20. Francine Lafontaine & Kathryn L. Shaw, 1999. "The Dynamics of Franchise Contracting: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 1041-1080, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uerssr:278686. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.