Making a Franchise Work: A Framework Base on Systematic Review
The purpose of this article is to examine the nature of franchising through a systematic review
of literature done on the subject. It aims to see what makes franchising work and place the
factors into a framework that is easy to reuse in the future for further research. The review is
done with 126 journal articles. The factors in this article include ownership structure, business
format design, contract design, the behavior of the franchiser and franchisee and their
interactions, and the age/size of the system and its units.
Ownership Structure: whether the franchisor and/or the franchisee own the business units and
the proportion of each, whether the responsibility for the daily operations of the unit is
delegated to a unit manager or not
Business Format Design: the brand name, the format facilitators directed at support, the format
facilitators directed at control
Contract Design: initial payments, ongoing payments, contract length, exclusive territories,
tying and fairness
Behavior of the Franchiser and the Franchisee and their interaction: closeness of the
relationship, commitment, trust, communication/ information exchange, dependence, conflict
and opportunistic behavior
The age and size of the system and its units: when franchises start later on from the existing
business they are more likely to succeed
Personal Learning Point
I truly didn’t realize how many different ways there were to franchise a business. I used to work
at Domino’s Pizza and I thought everything would be fairly similar, but now I realize how some
franchised places can be better than others.
Implications for Policy/Practice
The framework of the influence factors found can be used in further research for those studying
franchising and entrepreneurial efforts involved. Also, various gaps in research were found.
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