Plural franchise organizations [Elektronische Ressource] / Georg Spranger

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• Management

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• Publié par: westfalische_wilhelms-universitat_munster
• Publié le: 01 janvier 2006
• Nombre de lectures: 21
• Langue: English

Extrait

PLURAL
FRANCHISE ORGANIZATIONS

Georg Spranger




















Institute of Strategic Management | University of Muenster | Germany

























II
PLURAL FRANCHISE ORGANIZATIONS





A thesis presented to the Department of Economics
in partial fulfillment of the requirements for the degree of
Doktor Rerum Politicarum in the subject of Economics,
Westfaelische Wilhelms-Universitaet Muenster



Inauguraldissertation zur Erlangung des akademischen Grades
eines Doktors der Wirtschaftswissenschaften durch die
Wirtschaftswissenschaftliche Fakultät der
Westfälischen Wilhelms-Universität Münster











Georg Spranger
Muenster, Germany
September 2005

To entrepreneurs in franchising







© 2005-2006 by Georg Spranger
All rights reserved.

JEL: J33, L22, L25
D6





Thesis Committee
Dean: Prof. Dr. Theresia Theurl
Supervisor: Prof. Dr. Thomas Ehrmann
Co-Supervisor: Prof. Dr. Gerhard Schewe

Date of Disputation: November 24, 2005

For correspondence contact the author:
Georg Spranger | Institute of Strategic Management | University of Muenster |
Leonardo Campus 18 | D-48149 Muenster | Germany
Tel.: + 49 170 4718 500 | Fax: [phone]
E-Mail: [e-mail]
II
Table of Contents
Table of Contents......................................................................................................................... III
PART A............................................................................................................................................................1
I Introduction................................................................................................................................ 1
1 Background ............................................................................................................................ 1
2 Plural form research questions............................................................................................... 2
3 Content overview ................................................................................................................... 3
4 References............. 6
II Acknowledgements .................................................................................................................. 9
PART B ..........................................................................................................................................................11
I Why do franchisors combine franchises and company-owned units?..................................... 11
Overview................................................................................................................................... 11
1 Introduction.......................................................................................................................... 12
2 The plural structure of franchise chains............................................................................... 13
3 Franchisor motivations to apply the plural form.................................................................. 16
4 Empirical testing of the plural form aspects ........................................................................ 30
5 The plural form chosen for cooperative management ......................................................... 36
Appendix............ 38
References................................................................................................................................. 39
II Franchisee vs. Company Ownership – An Empirical Analysis of Franchisor Profit............. 43
Overview................................................................................................................................... 43
1 Introduction.......................................................................................................................... 44
2 Corporate finance for governance structures ....................................................................... 46
3 Empirical Analysis of the Profitability of Plural Chains ..................................................... 52
4 Conclusions and Discussion................................................................................................. 61
References................................................................................................................................. 63
III Beneficially constraining franchisor’s power 65
Overview................................................................................................................................... 65
Introduction............................................................................................................................... 66
1 Power allocation in franchise chains.................................................................................... 67
2 Managing the franchisee’s ex-ante risk ............................................................................... 70
III

3 Managing the franchisee’s ex-post risk ............................................................................... 77
4 Consequences of cooperative franchisor management ........................................................ 81
5 Concluding remarks ............................................................................................................. 85
References................................................................................................................................. 86
Appendix................................................................................................................................... 89
IV A Franchisor Decision Matrix for Structuring the Chain ..................................................... 93
Overview............ 93
1 Introduction.......................................................................................................................... 94
2 Hybrid form characteristics of franchising .......................................................................... 96
3 Implications of the franchise life-cycle thesis...................................................................... 99
5 A decision matrix for franchisors....................................................................................... 103
6 A new model of the franchise life cycle ............................................................................ 108
7 Implications for franchisor management in general .......................................................... 114
References............................................................................................................................... 115
Appendix................................................................................................................................. 119
PART C ........................................................................................................................................................120
Appendix............. 120
A. Entrepreneur Magazine Data 2004................................................................................... 120
B. Literature Overview ......................................................................................................... 141







IV
PART A
I Introduction
1 Background
This dissertation has been inspired by a discussion that I had with my supervisor Thomas Ehrmann
back in 2002 when we talked about the book “Franchise Organizations” by Jeffrey Bradach. Having
studied Bradach’s writing on a phenomenon which he called the plural form, I criticized his study
as being too anecdotal and too heavily reliant on qualitative data of five case studies. The reply I
received was both short and encouraging: “Go ahead, improve the issue.” Consequently, this thesis
contains my written work that has been undertaken since this conversation.
Borrowing an analogy from this world’s wild life serves well to introduce the plural form phe-
nomenon and thereby the topic of this book: Out in the world’s oceans, tunas and dolphins initially
compete for food. As they hunt for smaller fish, tunas encircle their targets and then attack right
towards the center. Breaks in the circle though regularly allow many prey to escape. Because of
their ability to communicate, dolphins on the other hand are more efficient hunters, though smaller
group sizes permit to attack only smaller swarms of fish. Stunningly now, tunas and dolphins fre-
quently join each other for hunting, thereby combining their individual strengths and alleviating
initially existent weaknesses. While the mass of tunas does the ground work, the fewer dolphins
coordinate the armada and close the breaks in the circle. Necessarily though, the groups have to
handle additional complex