Determinants of Contractual Completeness in Franchising

23 Pages Posted: 17 May 2010

See all articles by George W.J. Hendrikse

George W.J. Hendrikse

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Josef Windsperger

University of Vienna

Date Written: 26 2010 4,

Abstract

The aim of the study is to explain the determinants of contractual completeness in franchise relationships by formulating and testing various propositions derived from transaction cost theory, agency theory, property rights theory, organizational capability theory and relational view of governance. The degree of contractual completeness depends on behavioural uncertainty (negatively), trust (positively), franchisees’ specific investments (negatively), environmental uncer-tainty (negatively), intangibility of system specific know-how (negatively) and contract design capabilities (positively). The hypotheses are tested with a data base consisting of 52 franchise systems in Austria. The empirical results support the hypotheses regarding behavioural uncertainty, trust and intangible system-specific know-how.

Keywords: contractual completeness, franchising

JEL Classification: M13, O32, M, L26, O32

Suggested Citation

Hendrikse, George W.J. and Windsperger, Josef, Determinants of Contractual Completeness in Franchising (26 2010 4,). ERIM Report Series Reference No. ERS-2010-017-ORG, Available at SSRN: https://ssrn.com/abstract=1606085

George W.J. Hendrikse (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Josef Windsperger

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, A1090
Austria

HOME PAGE: http://im.univie.ac.at

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