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Motivation for Franchising: Rhetoric Versus Reality

DR RAJIV P. DANT IS AN ASSISTANT professor of marketing at the School of Management, Boston University, United States of America. His current research interests include distribution channels and franchising, research methodology, and macro/ international issues. Several theoretical arguments have been proposed in the literature about why successful businesses might choose the franchising route to growth and expansion over other competing alternatives. However, empirical verification of these explanations is virtually non-existent. This paper describes the results of three studies aimed at garnering evidence on this topic. Results indicate that economic as well as idiosyncratic motivations drive the franchising choice. Important differences are uncovered in the concerns and expectation sets of founders of franchise systems and professional managers. Data also provide some initial evidence on two important but yet untested arguments about the payoffs of franchising as proposed by Rubin (1978) and Norton (1988)

International Small Business Journal, Vol. 14, No. 1, 10-32 (1995)
DOI: 10.1177/0266242695141001


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