Multi-Unit Ownership Strategy in Franchising: Development of an Integrative Model

Journal of Marketing Channels, Vol. 17, No. 1, pp. 3-31

Posted: 4 Jan 2011

See all articles by Dildar Hussain

Dildar Hussain

University of Vienna - Institute of Business Administration

Josef Windsperger

University of Vienna

Date Written: 2010

Abstract

In this paper, we examine the evolution of multi-unit franchising (MUF) research and develop an integrative model for the franchisor’s choice of ownership strategy between single-unit and multi-unit franchising. Although several empirical studies were published on MUF in the last two decades, the research deficit primarily results from the lack of theoretical foundation of this ownership strategy. We extend the literature in the following way: First, based on the transaction cost view of governance mechanism, we examine the influence of environmental uncertainty on the choice of ownership strategy. Second, we develop hypotheses based on the resource-based and organizational capabilities view. Third, we investigate the influence of contractibility of resources and organizational capabilities on the choice of ownership strategy. Finally, we apply the screening theory and argue that specific investments of MUF have an ex-post bonding function, based on transaction cost reasoning, and an ex ante screening function.

Keywords: Multi-unit franchising, agency theory, transaction cost economics, resource-based theory, property rights theory

Suggested Citation

Hussain, Dildar and Windsperger, Josef, Multi-Unit Ownership Strategy in Franchising: Development of an Integrative Model (2010). Journal of Marketing Channels, Vol. 17, No. 1, pp. 3-31 , Available at SSRN: https://ssrn.com/abstract=1733010

Dildar Hussain (Contact Author)

University of Vienna - Institute of Business Administration ( email )

Bruenner Strasse 72
Vienna, A1210
Austria

Josef Windsperger

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, A1090
Austria

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
316
PlumX Metrics