Multi-Unit Franchising: A Comparative Case Analysis

Abstract

The objective of this study is to explain the franchisor’s choice between single-unit and multi-unit franchising. We employ a comparative case analysis method to compare the theoretical patterns with the empirical patterns of the governance forms. We selected two multi-national franchise networks based in Austria. Our findings suggest that franchisor’s multi-unit franchising strategy can be explained by monitoring costs, franchisee’s transaction-specific investments, franchisor’s system-specific assets, and franchisor’s financial resources scarcity.

Keywords: Multi-unit franchising, agency theory, transaction cost economics, resource-based and organizational capabilities view, comparative case analysis

JEL Classification: M21, L13