Rozprawy doktorskie na temat „Franchising”

Master's thesis deals with the possibility of expansion and the expansion of existing business with franchising chain.The creation of own franchising concept is still very scarcity in The Czech republic, because the possibility of expansion is not sufficiently well known to Czech entrepreneurs. The outcome of the work will be proposing the concept of franchising for the company AUTO HORÁK. The concept is designed to allow a basis for its expansion.

Bakgrund: Franchisekedjors framgång är beroende av att affärsidén följs till punkt och pricka, vilket medför att franchisetagare på många sätt blir styrda och begränsade i sitt agerande. Franchisetagare bör emellertid, inom de grundläggande ramarna, få ett visst spelrum för att driva sin verksamhet. En central fråga för franchisegivare är således hur de ska utforma de ramar inom vilka franchisetagarna ska hålla sig.

Syfte: Studiens syfte är att undersöka vad franchisegivare ämnar uppnå genom att styra sina franchisetagare samt att beskriva hur de styr, vilka styrproblem som den aktuella styrningen kan motverka och vilka bieffekter som kan uppstå.

Genomförande: Studien bygger på en litteraturstudie av texter som på olika sätt relaterar till franchising.

Resultat: Franchisegivare strävar mot att få franchisetagare att fokusera på enhetlighet, en tillfredställande kvalitet och hög omsättning. Styrning sker framför allt genom omfattande direktstyrning i form av drifthandböcker och franchiseavtal, vilka både begränsar franchisetagarnas handlingar samt tydliggör vilka beteenden som är önskvärda. Personalstyrning, i form av rekrytering är ett mycket viktigt styrverktyg då det är av yttersta vikt för franchisegivare att hitta franchisetagare med de rätta attityderna. Den omfattande direktstyrningen kan skapa konflikter mellan parterna samt hämma franchisetagares initiativförmåga.

Background: The success of franchise systems is to a large extent dependent on the strict following of the business concept, which implies that the franchisees’ behaviour in many ways is controlled and restricted. Franchisees should, however, within the frames of the business concept, be given a certain amount of freedom to manage their business. Thus, a key question for franchisors is how to design the frames within which the franchisees should operate.

Purpose: The purpose of the study is to investigate what franchisors intend to achieve by controlling their franchisees and to describe how they use management control, which control problems the management control can counteract and which side effects that may arise.

Realisation: The study was carried out through a literature study.

Results: Franchisors strive to encourage franchisees to focus on uniformity, a satisfying level of quality and high turnover. Management control is mainly carried out through extensive use of action control in the form of manuals and franchise contracts, which restrict the franchisees’ actions as well as clarify desirable behaviors. Personnel control, in the form of recruitment, is a highly important tool, since it is crucial for franchisors to find franchisees with the right attitudes. The comprehensive use of action control may cause conflicts between the parties as well as inhibit the franchisees’ initiatives.

The thesis deals with legislative regulation of franchising in the Czech Republic and which areas of law have influence on franchise agreements and how is this relationship to other areas of law solved. The thesis focuses on content of franchise agreements, on typical provisons of franchise agreements according to antitrust law, on protection of intellectual property rights, on unfair competiton and on personal data protection. Some aspects are discussed according to laws of the USA and Germany and are compared to Czech legislation. Available court decisions which deal with franchising were also used in the thesis. Gained knowledge was used to analyze franchise agreement of NATURHOUSE and to suggest some improvemenst in the agreement.

Sammanfattning

Bakgrund

Idag blir det allt mer vanligt att mindre enskilda mäklarbyråer ansluter sig till de stora franchisekedjorna. Anslutningen innebär att den tidigare enskilde aktören lämnar sitt varumärke och sin tidigare affärsidé för att istället ta del av ett välkänt varumärke och ett framgångsrikt affärskoncept.

Syfte & metod

Syftet med uppsatsen är att studera vilka positiva och negativa effekter franchising bidrar med i den svenska fastighetsmäklarbranschen samt vilka ekonomiska och personliga kriterier franchisegivarna ställer på franchisetagarna. Studien är en kvalitativ undersökning där väl insatta aktörer ifrån fastighetsmäklarbranschen har intervjuats om franchising.

Resultat

Studien visar att det finns både positiva och negativa sidor med franchising. Franchisegivarna upplever att franchising bidrar till en mer företagsam anda och bättre driv igenom hela verksamheten. De upplever dock att det krävs relativt höga volymer för att bli en framgångsrik franchisekedja. Franchisetagarna ser mycket positivt på det väletablerade varumärket och upplever att de tjänster som tillkommer genom franchising har bidragit till att de kan ägna mer tid åt den inkomstdrivande verksamheten. De upplever dock att deras frihet begränsas jämfört med när de drev egen mäklarbyrå. iii

 

 

 

Nowadays it is becoming more and more common for small individual estate agencies to merge with bigger franchisements. The merging constitutes to the previous individual executor leaving his/her trademark and the pre-existing business idea and substituting them with a renowned trademark and a successful business concept.

 

 

The purpose of the thesis is to study the positive and negative effects franchising may have on the Swedish real estate market as well as the economic and personal criteria conditions the franchisers may place upon the franchisees. The research has utilised qualitative data where experts from the appropriate area of expertise have been interviewed about franchisement.

 

 

The research has shown upon both positive and negative issues with regards to franchisement. The franchisers experience that franchisement contributes to a richer entrepreneurial spirit and a better drive in the whole scheme. However, it needs mentioning that there needs to be a relatively high volume conversion to become a successful franchisement. The franchisees also find positive points in the established trademark and feel that the services that arise through the franchisement have contributed to them being able to devote more time to the profit income activities. The negative aspect to the franchisement according to the franchisees is the restrictions placed upon them in comparison to when they were executing on their own.

 

Result

 

Purpose & method

 

Abstract

Background

Franchiseavtal är en typ av vertikalt avtal och bedöms på ett generösare sätt än horisontella avtal, dock kan även denna typ av avtal innebära skadeverkningar på konkurrensen. EU

strävar efter att uppnå fri och effektiv konkurrens, vilket gör det nödvändigt att undersöka hur detta bäst säkerställs. Den amerikanska antitrusträtten syftar till att säkerställa konsumenternas välfärd, vilket anses bäst uppfyllt genom fri konkurrens. Syftet med uppsatsen är att undersöka hur synen på franchiseavtal är inom dessa två rättsystem och se

vilka effekter som ett franchiseavtal kan ha på konkurrensen. Franchising kännetecknas av att en franchisegivare ger franchise till en franchisetagare, som måste leva upp till en viss standard och tillämpa vissa metoder vid försäljning av de produkter som tillhandahålls av

franchisegivaren. Risken att denna typ av avtal skulle innebära skador på konkurrensen är små, men trots detta faller franchiseavtalen inom tillämpningsområdet för till exempel artikel 81 EGF och sektion ett i Sherman Act. Då konkurrensrätten är starkt influerad av ekonomiskt tänkande, blir ekonomiska skolor av intresse vid bedömningen av franchiseavtal. Ekonomiska skolor som kommer att tas upp är Chicagoskolan och post-Chicagoskolan. Ekonomerna inom dessa skolor tenderar att behandla franchiseavtal som en typ av avtal som har små skadliga effekter på konkurrensen och ofta har positiva

konsekvenser för konsumenter.

Både amerikanska och europeiska konkurrensmyndigheter tenderar att ha en positiv bild av franchising då avtalsformen ofta gynnar alla parter. Genom rättsfall och beslut har det framkommit att franchiseavtalens laglighet beror på vilka klausuler som är inkorporerade i avtalet och att bedömningen görs från fall till fall. Klausuler som vanligtvis anses hämma konkurrensen är sådana som leder till att marknaden delas upp och klausuler som inte tillåter att franchisetagaren deltar i priskonkurrens. Problem kan dock uppstå genom att skyddet för franchisegivaren är alltför långtgående och att vissa klausuler som anses nödvändiga för att skydda franchisenätverkets identitet och rykte kan ha skadeverkningar.

Ten publications (1 book, 9 articles) are presented within the subject area of Retail Franchising. The aim is to demonstrate how this collection of work contributes individually and collectively to a better understanding Retail Franchising as part of Vertical Marketing Systems (VMS) in general, and its use as a growth strategy to expand the business successfully in international markets with differing legal, political, cultural/social, economic development and governance perspectives, as well as its impact on host country development. The significant growth of franchising in a number of developed/developing economies within the last thirty years has led to this business format franchising/retail franchising experiencing a rising importance in a number of academic debates and research. There has been a significant amount of research done on various aspects of franchising in general and international franchising in particular, from 1960s through to 1990s and the first decade of the new millennium. However, in terms of retail franchising and its fit within VMS and specifically its use as a growth strategy internationally with varying political, legal, sOcial/cultural environments, governance issues and market dynamics, there are still only a small number of contributions of any substance and significance. The author's work sits within a body of literature that spans a number of disCiplines. Conceptually franchising can be seen, for example, as a component of the wider areas of VMS, Growth and (specifically) the Internationalization of the Firm and PrincipalAgency theory. VMS had, in the author's opinion, the greater impact on his work and in setting the context for the same, this literature is discussed first. This collection of work brings together theoretical and practical aspects of business format franchising and retail franchising and uses them as an international growth strategy successfully by creating the right balance of 'standardisation' and 'adaptations' in managerial and marketing/operational dimensions without overall dilution of the core ethics of the concept/brand, against varied political, legal, social/cultural and economic development aspects as well as governance issues using a selection of regions/countries around the world. This collection of work demonstrates that the international markets for franchising are not as homogenous as it is assumed by many franchise companies, as well as researchers. There are, as the author's work highlights, a series of often highly distinctive and individualistic national markets with, in some cases, certain areas/aspects of convergence between the markets. From a theoretical point of view, they may even alter the balance between the economics of different growth strategies. From a practical perspective, one of the apparently attractive aspects of franchising, of being able to grow successfully internationally by rolling out exactly the same format/formula/concept, is not as straightforward as earlier work might make it appear.

Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, 2000.
Title as it appears in MIT commencement exercises program, June 2000: Franchising of branches in commercial banking
In the increasingly competitive environment faced by commercial banks at the retail segment of the market, one of the greatest challenges is to build and maintain an efficient and effective distribution channel, offering a superior quality of services to the customers, with low operational costs and minimum initial investment. Although apparently paradoxical, all these factors are crucial for a bank in getting and sustaining competitive advantage on such a highly competitive market. The focal point of this thesis is the proposition of the franchise system for the network of branches at commercial banks, as a way to dramatically reduce the constraints faced when trying to improve the distribution channel and, as an ultimate consequence, becoming more competitive. I firstly set the backdrop for the thesis in analyzing the importance of the distribution channel on the competitiveness of a commercial bank operating on the retail segment. The conclusion of this analysis is that the traditional model of growth using owned branches and ATM's has two main drawbacks. The first is the lack of flexibility in fitting the channels to the demand. The second is that it does not address the main constraints of growth: free capital to invest in growth and human resources with the desirable profile. With the backdrop set, I propose a set of alternative models of growth that are intended to increase flexibility (and eventually efficiency) of the distribution channels, and mainly to reduce the influence of the constraints on the growth and efficiency. Among these alternative model it is the franchise system. Most of the thesis is devoted to the description of the franchise model for commercial banks, with the relevant operational aspects of the interfaces between the bank and the franchisees, as well as the importance of the design of the incentives in order to fully achieve the potential benefits of the system. Complementing the description of the potential benefits and the risks in adopting the new system, I establish a set of actions to reduce those risks as well as the basic requirements a bank must meet before initiating the process of implementing the franchise system.
by Marcelo Maziero.
S.M.

Made available in DSpace on 2016-04-26T20:28:35Z (GMT). No. of bitstreams: 1 Flavio Lucas de Menezes Silva.pdf: 1492980 bytes, checksum: c577565f5b3d8f245ebe4d2528a18042 (MD5) Previous issue date: 2009-03-10
This dissertation intends to study the doctrine of franchising under special perspectives. It aims to give an overview of the historical and structural development of this precept since its remote origins, in Brazil and in other countries, to better understand its legal forms of materialization and its legal implications, during the times and in the contemporary era. Using philosophical conceptions, such as the doctrine named Culturalismo and the Three-dimensional Law Theory of the author Miguel Reale, as well as the entailed theories of the Intellectual Property knowledge; Contract Law; and the Theory of the Company , this study aspires to apprehend the way the 3rd generation s franchising principle, known as the Business Format Franchising main object of this dissertation - is related with the present consumer society, the economic field and, specially, with other related legal precepts, such as the know-how, the goodwill, and, particularly, the business establishment. It is determined to understand the Dasein of franchising in the contemporary world
A presente investigação tem por propósito o estudo do instituto do franchising segundo perspectivas singulares. Procura-se dar conta do desenvolvimento histórico e estrutural do instituto desde suas mais remotas origens, no Brasil e no mundo, para melhor compreender suas formas de manifestação e suas implicações jurídicas, ao longo do tempo e no mundo contemporâneo. Partindo de concepções filosóficas tais como o culturalismo e a Teoria Tridimensional do Direito formulada por Miguel Reale, bem como, as teorias vinculadas ao universo da Propriedade Intelectual, do Direito Obrigacional e da Teoria da Empresa, este estudo intenta apreender de que modo o instituto do franchising de terceira geração, isto é, o Business Format Franchising objeto fulcral deste trabalho se relaciona com a atual sociedade de consumo, as esferas econômicas e, especialmente, com outros institutos jurídicos a ele relacionados, tais como o know-how, o Aviamento, e, particularmente, o Estabelecimento Empresarial, com o fito de precisar o seu Dasein no mundo contemporâneo

The work provides the basic knowledge and principles of operation of the franchise business methods. In theory explains the path which leads to a formation of franchise system, from creation of conception to signing of franchise contract. The introduction captures dedicate to development of franchising from the very beginning, explains the basic concepts and the nature of franchise, advantages and disadvantages that brings stakeholders and briefly describes the legal environment in Czech republic. The following is a detailed description, step by step, leading to a creation of a franchise system and signing of franchise contract. The work deals with the content of franchise agreements, clarifying the role of franchise associations and Ethical Code in developing this type of business.

The diploma thesis focuses on description and analysis of the current situation on the market for franchise companies. Namely the conditions for cooperation, currently offered by the operators of the franchise concepts in the gastronomy field. For clarification, the work is divided into several chapters depicting the main aspects of franchise business, to which should pay attention every potential franchisee. The introduction summarizes the main characteristics of the franchising, focusing on characteristics of the franchise business, franchising forms available on the Czech market and advantages and disadvantages of operating on both parts. As following, there are discussed financial and tax aspects of the franchise businesses in the Czech Republic and the available options for financing the enterprises. There is a chapter also devoted to possible pitfalls of franchising and a conflict from the perspective of the competition laws. The next section of this thesis focuses on analysis of the advantages of franchising in terms of gastronomy, putting an emphasis on the main factors affecting the franchisees, such as support for the franchisee, franchise fees, return on investment, length of the contracts and franchise expansion strategy of the concepts. The last chapter of the analytical part of the diploma thesis is devoted to practical example which purpose is to compare the profitability of the two possible options of entrance to a gastronomic franchise concept. The conclusion is dedicated to a summary of the overall profitability of franchise business in general and specifically in the selected area. Furthermore, all the introductionary-defined hypotheses are either verified or disapproved.

Diplomová práce se zabývá aspekty podnikání franchisingových společností. První část práce se zabývá zařazením franchisingu v rámci podnikatelských sítí, charakteristikou subjektů, které se věnují a působí ve franchisingu a dále popisu potravinářského odvětví v ČR. Další část je zaměřena na konkrétní aspekty podnikání ve franchisingu, tedy na výběr franchisora franchisantem, podnikatelský plán, financování tohoto plánu a náležitostmi franchisingové smlouvy.

Graduation theses is concerned with the analysis of taking advantage of using franchising in the business, specifically with application of franchising for development of already existing firm. Theoretical part summarises the principles and presumptions of using franchising concept. The practical part deals with the application of hypothesis stated in the first part on the example of a real firm. The thesis suggests a solution of problems connected with creating a franchise network.

The diploma thesis contains a description of the situation in franchising in the Czech Republic. The main part is focused on a franchising system and future strategy of the project Hračky Modré z nebe. It presents the company Eltsen a.s. which wants to realize the project in the future, its historical development and current situation. The thesis describes the way which the company would like to choose to be able to realize whole project.

Mestrado em Contabilidade, Fiscalidade e Finanças Empresariais
Este estudo de caso de ensino apresenta uma história real que pode ser demonstrativa do tecido empresarial português, na medida em que se trata de uma empresa de índole familiar e não cotada em mercados de capitais. Retratando uma organização cujo principal objeto era o comércio por grosso de mobiliário infantil e que tinha um capital privado. Esta entidade desenvolvia as suas operações recorrendo a uma cadeia de franchising. Depois de uma fase de grande expansão e na sequência de um aumento substancial das dívidas que as lojas tinham para com a empresa-mãe, a empresa começou a ter graves problemas de liquidez. O que se propõe com este caso de ensino é que os alunos, com avançados conhecimentos de Corporate Finance, sejam capazes de desenvolver uma avaliação de uma empresa privada de caráter familiar. Os dados fornecidos são relativos aos processos, políticas internas e operações da empresa, bem como às demonstrações financeiras.
This case study presents a real story that can be demonstrative of the Portuguese business units insofar as it is a family business and not listed on capital markets. Portraying an organization whose main object was the wholesale trade of children's furniture and which had a private capital. This entity developed its operations using a franchising chain. After a major expansion and following a substantial increase in the debts that the stores had to the Master Franchise, the company began to have serious liquidity problems. What is proposed with this case is that students, with advanced knowledge of Corporate Finance, are able to develop a valuation of a private company with familiar structure. The data provided are related to the company's internal processes, policies and operations, as well as financial statements.
info:eu-repo/semantics/publishedVersion

The main focus of regeneration and socio-economic development of all regions of Ukraine, without any exceptions, is support and development of small and medium enterprises. Moreover, it is urgent to develop and implement new and adapt existing economic tools and methods including modern conditions of the economy. Analysis of international experience shows that one of the perspective directions of strengthening small and medium business is the development and support of franchising.

Diplomová práce je zaměřena na franchising a jeho využití v praxi. Cílem práce bylo vymezit specifika franchisingu v oblasti jazykových služeb a připravit podklady pro implementaci franchisingu v Jazykovém Institutu Praha s.r.o. Zejména se jedná o popis činností jednotlivých oddělení společnosti, vymezení potencionálních slabých míst a návrh na jejich odstranění. V další části práce jsou rozpracovány podmínky pro udělení franchisy. Součástí práce jsou také doporučení a varování pro úspěšný rozvoj a následné fungování franchisingové sítě.

This diploma thesis is focused on franchising and a practical application of a theory. The theoretical part describes basic principles of franchising, its advantages and disadvantages and franchise agreement. I put more emphasis on development and current state of franchising in the Czech Republic. I describe and evaluate franchising in the company Alpine Pro in the practical part of the thesis. I show that a purely Czech franchise concept is able to succeed in stiff competition - and not only in the Czech Republic. The aim is to evaluate franchisor - franchisee relationship (on the basis of the questionnaire research) and to suggest some measures and recommendations that would lead to improvement of the weak points of the franchise concept Alpine Pro.

Made available in DSpace on 2010-04-20T20:19:55Z (GMT). No. of bitstreams: 0 Previous issue date: 1998-09-02T00:00:00Z
O estudo a seguir disserta sobre o tema de franchising, mais especificamente sobre as tendências, idéias e soluções inovadoras desenvolvidas neste ramo em resposta à rápida globalização do mercado. 'Franchising é um método para a distribuição de produtos e/ou serviços que depende, basicamente, da capacidade de se reproduzir, em locais diferentes, um mesmo 'conceito de negócio' ... Num relacionamento de franquia, há normalmente duas partes: de um lado, o franqueador (o dono da marca e do sistema e quem concede a franquia) e, de outro lado, o franqueado (aquele que implanta a loja, o restaurante, a assistência técnica ou o que seja que o franqueador o autorize a instalar, operar e administrar)'.

I have decided to start this research because in this period the system of Franchising is having a great change and development especially in foreign countries as China, and small and medium company are having a huge change and improvement, thanks to this system that could give to them the possibility to expand their business. This thesis is important for understand the huge change that the system of franchising had in China and in Italy due to the improvement of the new legal regulation. With this thesis I want to describe the legal regulations of 2004 in Italy and in China by describing first the overview of Franchising and then by analyzing the franchising in Italy and in China. Those regulations helped the foreign industry to enter in Chinese market and gave them the possibility to expand their business in China. The conclusion of this thesis will describe the difficulties that could happens by entry into foreign market due to the cultural differences.

Första gången som EU-domstolen hade att ta ställning till franchiseavtal var i mål 161/84 Pronuptia de Paris. Kommissionen har därefter i några beslut fastställt riktlinjerna för hur franchiseavtal ska betraktas utifrån EU:s konkurrensrättsliga perspektiv. Frågeställningarna i uppsatsen behandlar franchisegivarens möjligheter att utveckla och skydda sitt affärskoncept; en enskild företagare och presumtiv franchisetagares risker och möjligheter med att ingå ett franchiseavtal samt på vilket sätt konsumenten gynnas av distributionssättet franchising.

Franchising är en form av samverkan mellan två näringsidkare; franchisegivaren och franchisetagaren. Precis som andra former av verksamheter är det viktigt för franchiseföretag att kunna anpassa sig till marknadsförändringar och kunna erbjuda ett konkurrenskraftigt utbud. Dock är deras handlingsmöjligheter att anpassa sig till förändringar begränsade på grund av det strikta avtalet. Därför är syftet med denna uppsats är att förstå franchisetagarens syn på franchiseverksamhet och till vilken grad varuutbudet påverkas av styrning från franchisegivaren. Uppsatsen är begränsad till varumärkesbutiker inom modebranschen eftersom denna bransch är i ständig förändring och konkurrensutsatt. Anpassning till förändring för att vara konkurrenskraftig är en viktig del i vår studie. Dessutom har vi valt att endast undersöka Business Format. För att uppnå vårt syfte valde vi att genomföra fallstudier, som bestod av tre intervjuer med franchisetagare i samma antal varumärkesbutiker i Stockholm. Varumärkesbutikerna som valdes ingår i två koncerner, RNB och Bestseller. Studien bestod dessutom av en intervju med Svenska Franchiseföreningens VD. Utifrån vår empiri och analys kommer vi fram till att avtalet är den centrala styrningsmekanismen som kontrollerar franchisetagarens verksamhet. Det förekommer oenigheter mellan parterna vad gäller avtalet och förändringar i sortimentet. Påtagligt är att detta leder till en sorts maktspel mellan parterna. Franchisetagare har ytterst små möjligheter att kunna påverka varusortimentet, inredningen eller marknadsföringen. Detta på grund av att det är franchisegivaren som gärna vill bibehålla grundkonceptet vilket tolkas som franchisekedjans identitet. Dock så förekommer en önskan hos franchisetagarna om lite mer handlingsfrihet utanför avtalets ramar. Framförallt vad gäller att anpassa sig till kundens efterfrågan. Detta eftersom de dagligen bemöter kundernas behov och ser vilka trender som förekommer på marknaden.

Franchise is a form of cooperation between two merging parts: a franchisor and franchisee. In similarity to other businesses, it is important for a company based on franchising to adjust to the rapid market changes in order to achieve a competitive advantage of commodities. Due to the strict franchise agreement, the franchisees are restricted in adapting to the market changes. The purpose of this thesis is, therefore, to get an understanding of the franchisees perspective in their business, and also to see to what degree the commodities are affected by the control from the franchisor. We have chosen to limit the study to brand retail-stores in the fashion industry because of the rapid changes that distinguish it. Adjustment to changes in order to become more competitive is the point of weight in our thesis. We have also restricted us to Business Format Franchising. Casestudies was performed to fulfil the purpose of the thesis. The study consists of interviews with franchisees from three brand-retail stores in Stockholm. The selected brand retail-stores are part of the two corporations, namely, RNB and Bestseller. An interview with the vice president of the Swedish Franchise Association was also conducted. Based on our findings in the empirical material and analysis we have come to the conclusion that the franchise agreement is the central controlling force that allows the franchisor to control their franchisees business. There are indifferences between the two parts when it comes to the franchise agreement and when it comes to changes in the supply. It is obvious that it leads to a power struggle between those involved. The franchisee has undeniably small opportunities to effect merchandise supply, interior decorating and marketing. This is because the franchisor holds a firm hand around the basic concept which acts as an identity for the franchise line. Thus, there is a need from the franchisees to more free thinking outside the borders of the agreement, specially in the matter of adapting to customer requests. That is because they daily encounter consumer needs and has an overview of the trends on the market.

Franchising är det mest vanliga kedjekonceptet i fastighetsmäklarbranschen och flera av de största fastighetsmäklarkedjorna är franchisekedjor. De fristående mäklarbyråerna får allt svårare att klara sig i den ökade konkurrensen. Det är främst fristående mäklarbyråer på mindre orter med ett etablerat varumärke samt nischade mäklarbyråer som klarar sig i konkurrensen med de stora kedjorna. På senare år har antalet kedjeanslutna fastighetsmäklare ökat betydligt och flertalet av mäklarkedjorna är rikstäckande på marknaden. Syftet med vår uppsats var att undersöka vilka förväntningar franchisetagare som tidigare har drivit en fristående mäklarbyrå hade på franchisekonceptet innan de anslöt sig till en franchisekedja. Vi har sedan undersökt hur väl franchisekonceptet levde upp till franchisetagarnas förväntningar. Undersökningen har gjorts genom intervjuer med franchisetagare från olika franchisekedjor runt om i Sverige. Gemensamt för de intervjuade franchisetagarna är att de tidigare har drivit en fristående mäklarbyrå. Vi har kommit fram till att franchisetagarna har stora förväntningar på bland annat marknadsföring och varumärkets inverkan samt att franchisekonceptet lever upp till förväntningarna. Syftet var även att undersöka om nyttan av franchising överstiger kostnaden för franchisekonceptet. Slutsatsen av vår uppsats är att franchisekoncept i fastighetsmäklarbranschen är värt avgiften
Franchising is the most common affiliation in the real estate industry and most of the largest real estate agencies are franchise chains. It is difficult for the independent agencies to survive in the competition. Independent agencies can survive in small cities or if they are specialized in different areas of the real estate industry. The last couple of years the number, of real estate agents connected to an affiliation have increased significantly and most affiliations are nationwide. The intention of our thesis is to analyze what expectations franchisees, that have been independent, had on the franchise before they got affiliated. We have also investigated if the franchise met the expectations. Our study has been done by interviews with franchisees from different affiliations in Sweden. All franchisees had an independent agency before they got affiliated. The result of our study is that the franchisees had big expectations on marketing and the effect of the brand. Their expectations were met by the franchise. Another intention of our thesis was to explore if the benefits of franchise excess the cost that the franchisees pay for being affiliated. The conclusion of our thesis is that franchise is worth the fee franchisees pay to be a part of franchise.

My first contact with franchising involved advising a foreign franchise company which was entering the UK market. This would be a most unlikely introduction to franchising for any lawyer nowadays. I was also fortunate in that the company which had consulted me had become one of the pioneers of franchising in the USA. Its founder Bill Rosenberg had been material in creating the International Franchise Association. This gave me an exposure in the US market place which was strengthened when I became the managing director of their operations in the UK with. the additional grandiose title of Area Vice President - Europe. My involvement in that company (Dunkin Donuts) gave me three valuable insights into franchising • As I was involved at managerial level I received a good grounding in the basic business concept and development and understanding of the dynamics of the personal relationships which arc a key component of the development of a successful franchise system • I learned about the issues confronting a franchise company seeking to open in another country not merely as a lawyer but also as a business person • [ learned what was involved in establishing and marketing a franchise operation in the UK market place. That said as I look back I find it difficult to put my finger on how I first became well known internationally. I would suggest that it was a combination of the association with Dunkin Donuts and the later availability of "The Guide to Franchising". At that time so far as franchising was concerned internationally was basically the USA. The development of cross border franchising activity was then in its infancy. Later on everyone would look to the USA for role models and since that was the only market place worth considering it suited me to become well known there. By the time the 1970's started I was in touch with the two leading franchise lawyers in the USA - professional relationships which blossomed into personal friendships lasting to this day. In 1972 the UK government was carrying the Fair Trading Bill (which became the Fair Trading Act 1973) through parliament. During the course of its passage there was a High Court decision involving a "Pyramid Selling Scheme" which the Judge characterised as "a fraud of a grave and far reaching nature". The government added a Part to the Bill dealing with Pyramid Selling Schemes which would require the introduction of regulations.

For a field of social science to have usefulness, it must have a conceptual framework that explains and predicts a set of empirical phenomena not explained or predicted by conceptual frameworks already in existence in other fields (Shane 2000). This study explored entrepreneurial oppòrtunities within franchising. On the surface, franchising appears to create a system whose underpinnings are standardization, replication, and compliance with detailed long-term contracts--a seemigly unpromising environment in which to explore entrepreneurial opportunities. I argue that heterogeneity and organizational complexity exist among franchising firms, attributes overlooked in studies that characterized the phenomenon narrowly as a uniform, dyadic relationship between franchisors and franchisees. This study found that contractual provisions, franchisee obligations, and organizational hierarchies varied among franchises, and that a relationship existed between the presence of these attributes and differential performance among franchising firms. As a contractual relationship between distinct entities, franchising is governed by a variety of disclosure, trade, and intellectual property laws. Its contractual provisions and formal disclosure documents defme a formal context in which franchising is conducted. In addition to franchising's formal context, an operational realm also exists, one in which daily operations of franchised businesses take place. This study revealed that franchising's operational realm is not always contained within the defined limits of its formal agreements, suggesting greater franchisee discretion may exist than revealed in the agreement. As a result of organizational discontinuities in franchising's formal context, and franchisee discretion within its operational context, diverse opportunities for entrepreneurship exist within franchising beyond the birh of a franchisor's firm.

A franchise contract relocates distributable rent between franchisor and franchisee. With decentralized wage bargaining this modifies the position of the union in wage bargaining. If the rent is relocated to the franchisor completely, then even a strong union is not able to raise the wage above reservation level in the franchisee's firm. If franchisor and franchisee negotiate on rent division, there is an incentive to increase franchise fee with the consequence that franchisee's wage is pushed down. Therefore the overall rent assigned to labor depends on the differences of labor intensity in the franchisor's and franchisee's firm. Firm owners may be able to transfer distributable rents from a firm with a strong union to one with a weak union. Additional a franchising contract shows up a first mover advantage. The franchising contract is placed before wage bargaining, benefiting the franchisor. (author's abstract)
Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

The aim of this thesis is to analyze franchising as a business method and look at it especially from legal point of view. In the first (theoretical) part of the thesis we mention the history of franchising, then we specifie the advantages and disadvanteges of franchising and we also look at the current situation of franchising in the Czech Republic and in the world economy as well. The rest of the theoretical part is devoted to the legal aspects of franchising. The theoretical part of the thesis is followed by the practical part, which describes establishing of a franchising relationship with Vodafone CZ. Emphasis is placed again on legal aspects and much space is devoted to the contract on the future franchising agreement. The goal of this work is to introduce people considering to enter the franchising relationship with the positives and pitfalls, and assist them in deciding whether to enter into this relationship or not.

Theaimofthisdiploma thesis is a business plan and itsapplicationpossibility in franchisepolicy.Thetheoretical part isfocused on thebuinessplan, itsdescription and content.Wedealwithfranchise, itsdefinition, advantages and disadvantagesofparticipans, in theoretical part as well. Thepractical part describes business planofopeningfranchised branch "UniCreditBank Expres of UniCredit Bank Czech Republic, i.n. c.

This research identifies the experiences, behaviours, attitudes, values and beliefs of Australia's most successful franchise owners in order to understand the reasons for their outstanding success in a business environment designed to encourage replication and uniformity. In this study, twelve of Australia's best franchisees have been interviewed to find out their personal qualities that have enabled them to succeed in the franchise business environment. A qualitative methodology within a constructivist ontology and interpretivist epistemology has been used. Interviews were conducted, coded, analysed and models developed using NVivo software. The coding and analysis led to the development of six key characteristics or behaviours of successful franchisees. Australia's best franchisees are successful because they are highly motivated, have outstanding business skills, are committed to franchising, demonstrate remarkable personal qualities reflected in highly ethical leadership with exceptional communication skills and create a business environment that has real customer focus. Human qualities are difficult to isolate and quantify. This research highlights those necessary to succeed in franchising and business generally. The findings from this research have been presented as a framework for franchisee success. The framework provides the basis of human characteristics and elements to consider in franchisee selection and business skill development. The title of this research is in many ways its conclusion. The contribution of franchising to Australia's entrepreneurial spirit is the growth and development of the business skills of franchisees, many of whom are entrepreneurs in the making.

This research identifies the experiences, behaviours, attitudes, values and beliefs of Australia's most successful franchise owners in order to understand the reasons for their outstanding success in a business environment designed to encourage replication and uniformity. In this study, twelve of Australia's best franchisees have been interviewed to find out their personal qualities that have enabled them to succeed in the franchise business environment. A qualitative methodology within a constructivist ontology and interpretivist epistemology has been used. Interviews were conducted, coded, analysed and models developed using NVivo software. The coding and analysis led to the development of six key characteristics or behaviours of successful franchisees. Australia's best franchisees are successful because they are highly motivated, have outstanding business skills, are committed to franchising, demonstrate remarkable personal qualities reflected in highly ethical leadership with exceptional communication skills and create a business environment that has real customer focus. Human qualities are difficult to isolate and quantify. This research highlights those necessary to succeed in franchising and business generally. The findings from this research have been presented as a framework for franchisee success. The framework provides the basis of human characteristics and elements to consider in franchisee selection and business skill development. The title of this research is in many ways its conclusion. The contribution of franchising to Australia's entrepreneurial spirit is the growth and development of the business skills of franchisees, many of whom are entrepreneurs in the making.

Franchising performs an important role in the production and distribution of goods and services. Current research suggests that much of the future growth in franchising in many world economies will be attributable to the growth in multiple unit franchising arrangements. Multiple unit franchising refers to an organisational arrangement in which franchisees are permitted to own more than one unit in the same franchise system. Although the Australian franchising sector has reached an early stage of maturity, the limited acceptance of multiple unit practices contrasts with overseas experiences. This remains a curious anomaly, as significantly higher levels of multiple unit ownership are observable in comparably mature markets in other countries. Multiple unit franchising appears a conceptually unsound alternative to traditional dyadic revenue sharing franchising relationships as it does not benefit from the structural and operational synergies commensurate with ownership attention at the unit level. Therefore, from the franchisor's perspective, multiple unit franchising appears a suboptimal alternative to traditional franchising. From the franchisee's perspective, alternative investment opportunities may present superior choices to multiple unit arrangements. Franchisees have only limited control of their organisation, pay substantial percentages of their gross revenues in the form of fees and royalties, and forgo the ability to capitalise on the growth in the value of their intangible assets. While these apparent disadvantages may be overcome by an individual's desire to 'buy a job', the reasons explaining a franchisee's desire to own multiple units is less clear. Recent research has attempted to explain the ubiquity and increasing popularity of this organisational form, given these operational disadvantages, albeit mostly from the perspective of the franchisor. Previous empirical research in the United States views multiple unit franchising as a driver of system growth, promoting system-wide adaptation to competition. However, this conventional wisdom fails to consider additional franchisor motivational incentives. Moreover, anecdotal evidence in the Australian franchising sector contrasts markedly with the relationships exposed in multiple unit analyses overseas. Thus, existing franchising research does not adequately capture the range of incentives motivating an entrepreneur's decision to elect the franchising channel of distribution. In addition, at this time no theoretical framework exists espousing the reasons that lead to a franchisee's adoption of these hybridised organisational forms. This has led some researchers to conclude that multiple unit franchising is in an embryonic stage. Further complicating our understanding of the choice of this organisational form is the absence of multiple unit incentives analysis in Australia. In addition to gaining valuable insights into current managerial practice, the first purpose of this research is to support informed decision-making in the future through an investigation of the fundamental and under-researched question of why franchisors choose to grow and expand through multiple unit arrangements. This research focuses upon theory development by integrating known concepts with newly identified motivational incentives that caveat the adoption of this organisational arrangement. These incentives are incorporated in a model of multiple unit franchising from the perspective of the franchisor. The model describes multiple unit franchising as a function of the context of franchise system context (age, system corporatisation, plurality of distribution, geographic dispersion of available units and level of existing intra-firm conflict), and strategic (ownership redirection, perceived future agency cost minimisation, and system rewards) factors. In an attempt to extend the cross cultural boundaries of previous franchising research, a given level of multiple unit expansion is described through the predicted outcome of franchise system growth. Secondly, this research investigates the reasons why franchisees become multiple unit holders. This process involved the integration of existing theories drawn from different disciplines and presents an integrated theoretical model explaining why individuals are driven to create their own subsystems within a franchisor-owned network. The multi-perspective approach is critical to advancing our understanding of the genesis of this organisational arrangement, and specifically the issues of who should engage in multiple unit franchising arrangements, and when franchisors and franchisees should sanction and adopt mini-chains within a single franchising system. Thus, this proposal addresses gaps in the literature by investigating the research question: What are the motivational incentives that influence franchisors and franchisees to adopt multiple unit franchising? That is, this thesis aims to identify the reasons that justify the existence of multiple unit franchising forms from the franchisor and franchisee perspectives. A three-stage methodological approach is used in this research. Franchisor motivations are examined within stages one and two. Franchisee motivations are detailed in section three. An examination of the parent disciplines of resource scarcity theory, agency theory, and the immediate discipline of multiple unit franchising resulted in the development of a preliminary conceptual model and general set of propositions explaining why franchisors choose to engage in multiple unit franchising arrangements. In stage one an exploratory survey of seven franchisors from a range of industries of different type, size and age was conducted using a convergent interviewing technique, to gather insights and reasons into multiple unit practices. The stage one findings were used to clarify and confirm the appropriateness of the conceptual model of multiple unit franchising. Permission was granted by the Franchise Council of Australia to include a limited number of questions in the Franchising Australia 2002 survey. In the (second) stage of this research, a sample of the population of franchisors in Australia was surveyed by an electronic questionnaire administered on the World Wide Web in June and July 2002. The resultant data was analysed to test a revised theoretical model of franchisor motivations to adopt multiple unit franchising arrangements. Inferential statistical tests were used to test the relationships hypothesised in the model of multiple unit franchising from the franchisor's perspective. The results built upon the inductive stage of the research, providing a descriptive snapshot of multiple unit franchising in Australia. The third stage of this research explored the factors influencing a franchisee's decision to become a multiple unit owner. Following a review of the predominantly single unit literature, a model and series of general propositions explaining multiple unit franchising was developed explaining multiple unit ownership in terms of subsystem size (expected decision making power and anticipated subsystem economies of scale), franchisee context (franchisee liquidity, entrepreneurial orientation), and strategic (pre-empt future intra-system competition) factors. The appropriateness of the conceptual model and propositions were tested through convergent interviews with ten multiple unit and nine single unit franchisees within a prominent fast-food system. This resulted in a revised conceptual model and general set of propositions that contribute to the development of existing theory and will form the basis of future empirical assessment. This research makes an original contribution to the body of knowledge about multiple unit practice through inductive analysis that not only recognises the reach of this franchising phenomenon, but also develops our theoretical understanding of why franchisors and franchisees engage in intra-firm mini-chain development. So, apart from gaining valuable insight into current managerial motivations and practice in Australia, a concomitant aim of this research is to enhance the generalisability of prior franchising theory developed in the United States through examination of the under-researched areas of why franchisors allow, and franchisees choose, to own more than one unit within the same franchising system. This research has contributed to the body of knowledge on franchising. Based upon the extant literature and exploratory analyses, models of multiple unit franchising from the franchisor and franchisee perspective were developed. It is the first empirical analysis of multiple unit franchising in Australia and provides a starting point for future research. This research has made a valuable contribution in being the first to: investigate multiple unit franchising in an Australian setting using primary data sources; utilise an inductive convergent interviewing technique to clarify and confirm the appropriateness of theories derived from the extant literatures; survey a large representative sample of Australian franchisors about multiple unit franchising; survey a sample of franchisees about multiple unit franchising; incorporate aspects of agency theory, resource constraints theory and multiple unit franchising to develop a model of multiple unit franchising; use a three-stage methodology involving qualitative and quantitative analyses; investigate motivations and factors influencing multiple unit franchising choice; introduce new constructs and reposition existing constructs into multiple unit franchising theory. In conclusion, this original and comprehensive research has found that more experienced Australian franchisors appear to adopt multiple unit franchising, possibly as a method of sustaining growth in units and system-wide sales. Furthermore, entrepreneurial franchisees appear to source private sources of equity in order to grow their holdings sequentially as they anticipate savings accruing from economies of scale while limiting competition within their franchise system.

Franchising performs an important role in the production and distribution of goods and services. Current research suggests that much of the future growth in franchising in many world economies will be attributable to the growth in multiple unit franchising arrangements. Multiple unit franchising refers to an organisational arrangement in which franchisees are permitted to own more than one unit in the same franchise system. Although the Australian franchising sector has reached an early stage of maturity, the limited acceptance of multiple unit practices contrasts with overseas experiences. This remains a curious anomaly, as significantly higher levels of multiple unit ownership are observable in comparably mature markets in other countries. Multiple unit franchising appears a conceptually unsound alternative to traditional dyadic revenue sharing franchising relationships as it does not benefit from the structural and operational synergies commensurate with ownership attention at the unit level. Therefore, from the franchisor's perspective, multiple unit franchising appears a suboptimal alternative to traditional franchising. From the franchisee's perspective, alternative investment opportunities may present superior choices to multiple unit arrangements. Franchisees have only limited control of their organisation, pay substantial percentages of their gross revenues in the form of fees and royalties, and forgo the ability to capitalise on the growth in the value of their intangible assets. While these apparent disadvantages may be overcome by an individual's desire to 'buy a job', the reasons explaining a franchisee's desire to own multiple units is less clear. Recent research has attempted to explain the ubiquity and increasing popularity of this organisational form, given these operational disadvantages, albeit mostly from the perspective of the franchisor. Previous empirical research in the United States views multiple unit franchising as a driver of system growth, promoting system-wide adaptation to competition. However, this conventional wisdom fails to consider additional franchisor motivational incentives. Moreover, anecdotal evidence in the Australian franchising sector contrasts markedly with the relationships exposed in multiple unit analyses overseas. Thus, existing franchising research does not adequately capture the range of incentives motivating an entrepreneur's decision to elect the franchising channel of distribution. In addition, at this time no theoretical framework exists espousing the reasons that lead to a franchisee's adoption of these hybridised organisational forms. This has led some researchers to conclude that multiple unit franchising is in an embryonic stage. Further complicating our understanding of the choice of this organisational form is the absence of multiple unit incentives analysis in Australia. In addition to gaining valuable insights into current managerial practice, the first purpose of this research is to support informed decision-making in the future through an investigation of the fundamental and under-researched question of why franchisors choose to grow and expand through multiple unit arrangements. This research focuses upon theory development by integrating known concepts with newly identified motivational incentives that caveat the adoption of this organisational arrangement. These incentives are incorporated in a model of multiple unit franchising from the perspective of the franchisor. The model describes multiple unit franchising as a function of the context of franchise system context (age, system corporatisation, plurality of distribution, geographic dispersion of available units and level of existing intra-firm conflict), and strategic (ownership redirection, perceived future agency cost minimisation, and system rewards) factors. In an attempt to extend the cross cultural boundaries of previous franchising research, a given level of multiple unit expansion is described through the predicted outcome of franchise system growth. Secondly, this research investigates the reasons why franchisees become multiple unit holders. This process involved the integration of existing theories drawn from different disciplines and presents an integrated theoretical model explaining why individuals are driven to create their own subsystems within a franchisor-owned network. The multi-perspective approach is critical to advancing our understanding of the genesis of this organisational arrangement, and specifically the issues of who should engage in multiple unit franchising arrangements, and when franchisors and franchisees should sanction and adopt mini-chains within a single franchising system. Thus, this proposal addresses gaps in the literature by investigating the research question: What are the motivational incentives that influence franchisors and franchisees to adopt multiple unit franchising? That is, this thesis aims to identify the reasons that justify the existence of multiple unit franchising forms from the franchisor and franchisee perspectives. A three-stage methodological approach is used in this research. Franchisor motivations are examined within stages one and two. Franchisee motivations are detailed in section three. An examination of the parent disciplines of resource scarcity theory, agency theory, and the immediate discipline of multiple unit franchising resulted in the development of a preliminary conceptual model and general set of propositions explaining why franchisors choose to engage in multiple unit franchising arrangements. In stage one an exploratory survey of seven franchisors from a range of industries of different type, size and age was conducted using a convergent interviewing technique, to gather insights and reasons into multiple unit practices. The stage one findings were used to clarify and confirm the appropriateness of the conceptual model of multiple unit franchising. Permission was granted by the Franchise Council of Australia to include a limited number of questions in the Franchising Australia 2002 survey. In the (second) stage of this research, a sample of the population of franchisors in Australia was surveyed by an electronic questionnaire administered on the World Wide Web in June and July 2002. The resultant data was analysed to test a revised theoretical model of franchisor motivations to adopt multiple unit franchising arrangements. Inferential statistical tests were used to test the relationships hypothesised in the model of multiple unit franchising from the franchisor's perspective. The results built upon the inductive stage of the research, providing a descriptive snapshot of multiple unit franchising in Australia. The third stage of this research explored the factors influencing a franchisee's decision to become a multiple unit owner. Following a review of the predominantly single unit literature, a model and series of general propositions explaining multiple unit franchising was developed explaining multiple unit ownership in terms of subsystem size (expected decision making power and anticipated subsystem economies of scale), franchisee context (franchisee liquidity, entrepreneurial orientation), and strategic (pre-empt future intra-system competition) factors. The appropriateness of the conceptual model and propositions were tested through convergent interviews with ten multiple unit and nine single unit franchisees within a prominent fast-food system. This resulted in a revised conceptual model and general set of propositions that contribute to the development of existing theory and will form the basis of future empirical assessment. This research makes an original contribution to the body of knowledge about multiple unit practice through inductive analysis that not only recognises the reach of this franchising phenomenon, but also develops our theoretical understanding of why franchisors and franchisees engage in intra-firm mini-chain development. So, apart from gaining valuable insight into current managerial motivations and practice in Australia, a concomitant aim of this research is to enhance the generalisability of prior franchising theory developed in the United States through examination of the under-researched areas of why franchisors allow, and franchisees choose, to own more than one unit within the same franchising system. This research has contributed to the body of knowledge on franchising. Based upon the extant literature and exploratory analyses, models of multiple unit franchising from the franchisor and franchisee perspective were developed. It is the first empirical analysis of multiple unit franchising in Australia and provides a starting point for future research. This research has made a valuable contribution in being the first to: investigate multiple unit franchising in an Australian setting using primary data sources; utilise an inductive convergent interviewing technique to clarify and confirm the appropriateness of theories derived from the extant literatures; survey a large representative sample of Australian franchisors about multiple unit franchising; survey a sample of franchisees about multiple unit franchising; incorporate aspects of agency theory, resource constraints theory and multiple unit franchising to develop a model of multiple unit franchising; use a three-stage methodology involving qualitative and quantitative analyses; investigate motivations and factors influencing multiple unit franchising choice; introduce new constructs and reposition existing constructs into multiple unit franchising theory. In conclusion, this original and comprehensive research has found that more experienced Australian franchisors appear to adopt multiple unit franchising, possibly as a method of sustaining growth in units and system-wide sales. Furthermore, entrepreneurial franchisees appear to source private sources of equity in order to grow their holdings sequentially as they anticipate savings accruing from economies of scale while limiting competition within their franchise system.
Thesis (PhD Doctorate)
Doctor of Philosophy (PhD)
Department of Marketing
Griffith Business School
Full Text

Abstract

Title: Strategic Communication within franchising, a case study of Gallerix

Number of pages: 60 (65 with enclosures)

Author: Charlotta Babington Thorszelius

Course: Media and Communication D

Period: Spring 2008

University: Division of Media and Communication, Department of Information Science, Uppsala University, Sweden

Purpose/Aim: To find out, by doing a case study, how communication between the two parties in a franchising relationship works, and how communication can strengthen the concept and brand. By analysing the communication, identify strengths and weaknesses and make suggestions for improvement.

Material/Method: Qualitative method by using interviews

Main results: The understanding of the concept and the relationship between franchiser and franchisees are vital for the success of the franchising chain. The main internal communication channel today is the Intranet, and more personal contacts and meetings are requested. The yearly meetings are appreciated by the franchisees, but the content of the meetings are of varied quality. The chains value words, which are important for how the brand is perceived by the customer, are slightly different from how the franchiser and the franchisees sees them. One reason for this can be that the franchiser feels that it is difficult to have common goals and visions for a franchising chain, as the two parties have their own differing goals and visions. Not all franchisees follow the concept to 100%, and this has an impact on the chain and the brand, as a whole.

Key words: Understanding, relationship, brand, franchising, communication, information

Contractual arrangements have been the subject of a substantial body of economic research. In particular, economists have sought an explanation for the existence of share contracts. Under this kind of contract, two or more parties share in the output of the production process. These contracts present a problem to economists because they imply more than one residual claimant. Thus incentives are diluted and inefficiency is expected to result. But this type of contract has existed for centuries and continues to be used today. Why is that if they are inefficient? The answer is that under conditions of uncertainty and imperfect information, share contracts can be preferable to fixed-wage (vertical integration) or fixed-rent (market transaction) agreements. In fact, many explanations for the existence of share contracts and their coexistence with fixed-wage and rental arrangements are found in the theoretical literature. While the theoretical literature on the subject of share contracts has flourished over the last decade, empirical analyses of these models has lagged behind. This thesis aims to rectify the situation somewhat. More precisely, recent advances in the theoretical literature are applied to the analysis of franchise contracts. An empirical model of franchising based on profit-maximizing behavior is developed which makes it possible to examine whether the factors theorists have suggested as potential explanations for share contracts are relevant when it comes to explaining what one observes in the context of franchising, and whether their effects are consistent with predictions from the various theories. Both the contract mix, i.e. franchisors' decisions concerning the proportion of stores they want to operate and franchise, and the terms of the franchise contract, fixed and variable fees, are examined. In order to carry out the analysis, data on a cross-section of 548 individual franchisors in 1986 were gathered. These franchisors are involved in a variety of business activities in the U.S., such as Fast-food Restaurants, Business Aids and Services, Construction and Maintenance, and Non-food Retailing. Censoring problems arise from the fact that a number of franchisors in the sample franchise all of their outlets. Also, some firms require no variable or no fixed fee. For these reasons, the maximum likelihood Tobit estimator is used. Empirical work in an area such as this, where theories rely on concepts that are not easily quantifiable, can hardly provide unambiguous answers about the validity of the theories. Nevertheless, the following results emerge from the empirical analysis. First, the effect of risk, measured either by the proportion of discontinued outlets or by the variance of sales in the sector, is found to be the opposite of what pure risk-sharing and one-sided hidden-action models would predict. Second, firms resort to franchising more often when monitoring downstream operators becomes costlier, and use it proportionately less when the value of the inputs they themselves provide increases. This is consistent with two-sided hidden-action models. Results with respect to capital-market-imperfection arguments are rather inconclusive. It appears that franchising relaxes some form of constraint franchisors face in trying to expand their operations, since they use it more when they are growing faster, but whether this is a financial constraint remains unclear. The explanatory power of the model is greater with respect to the proportion of franchised stores than it is for any of the two fees. Thus, in response to changes in the exogenous variables considered here, franchisors, who have a choice between modifying the terms of their franchise contract or changing the proportion of stores they want to franchise, tend to do mostly the latter. Contrary to what one would have expected on a theoretical basis, the observed royalty rates and franchise fees are not negatively correlated in this data set. Combined with the fact that the model is less satisfactory relative to the fees, this suggests that there are considerations in the determination of the royalty rate and the franchise fee that have not been taken into account in the theories. One possibility in the case of the fixed fee is that it may include the price of services provided by the franchisors. It also appears that franchisors use input sales as another means to extract rent from franchisees. This may contribute to the lack of correlation between the two fees. Finally, the equation for the franchise fee was derived under the assumption that all remaining surplus at the downstream level, given the royalty rate, should be extracted through the franchise fee. The lack of relationship between the fees could be an indication that this assumption is incorrect, and that there are in fact rents left at the downstream level. This would be consistent with the existence of queues of potential franchisees in many franchise chains.
Arts, Faculty of
Vancouver School of Economics
Graduate

This paper examines franchising regulation in Australia as a case study for the analysis of regulation based on established regulatory theory. A literature review is conducted to establish and critique the theory of regulation based on the four main areas of established theory; regulatory purpose, regulatory strategies, rulemaking and enforcement. Case study data is drawn from primary source material and academic commentary on franchising regulation and presented according to the eras of franchising regulation in Australia, moving from the first proposals for legislation in the 1970s to the prescribed mandatory Franchising Code of Conduct model adopted in 1998 and refinements made to that scheme up to 2006. An analysis is then conducted on each major aspect of Australian franchising regulation using the established theoretical principles and analytical constructs available in the literature. The study concludes that the Franchising Code of Conduct regime, as a culmination of the experience gained and study undertaken in the preceding eras, is characterised by the availability of a broad range of enforcement options from harsh deterrence-oriented measures to more gentle and cooperative compliance-oriented options constituting an effective regulatory pyramid. The effectiveness of the regime is further bolstered by the presence of a credible regulatory strategy pyramid which emphasises the real possibility of escalated intervention, coupled with skilful deployment by the Australian Competition and Consumer Commission as enforcement agency. The principal weakness of the scheme is identified as unnecessarily ambiguous drafting in some areas, which compromises the quality of the otherwise highly transparent ruleset. It is suggested that the choice of regulatory strategy, often a focus of superficial examinations of regulation, is largely irrelevant to the nature of the regulation, with other features such as enforcement strategy, legitimacy, and availability of credible sanctions proving much more important. A proposal for an analytical framework based on the established theory is developed based on the experience of applying that theory to the case study. While this outlined framework assists in broadening focus across the entire regulatory regime to encourage assessment of the component parts, a lack of cohesion and linkage amongst the components highlights a shortcoming in the development of regulatory theory and an opportunity for further research.