Franchising and The Family Firm: Creating Unique Sources of Advantage Through 'Familiness'

Abstract

The paucity of research examining family firms engaged with franchising is surprising. We theorize about differences in franchising behavior between family and nonfamily firms and the relative advantages accruing to family firms in this context. We also explore how selection processes tend to lead to family franchisor/family franchisee matches that enable a more effective sharing of complementary resources. The theoretical framework we develop is grounded in the “familiness” of the family firm as suggested by the logic of the resourcebased view. Additionally, our theoretical analysis extends and complements the frequent use of agency theory as the basis for studying franchising.

Keywords: Family firm, franchising, familiness, resources, performance