Using Resource‐Based Theory to Help Explain Plural Form Franchising

24 Pages Posted: 9 Apr 2014

See all articles by William Gillis

William Gillis

University of South Alabama - Department of Management

James G. Combs

University of Alabama - Culverhouse College of Commerce & Business Administration

David J. Ketchen Jr.

Auburn University

Date Written: May 2014

Abstract

Agency theory is the dominant explanation for entrepreneurs' decisions about how much to grow through franchising vis‐à‐vis company ownership. We introduce a resource‐based explanation and submit that the proportion franchised is influenced by efforts to organize franchisor‐owned and relational strategic assets so that their value can be best leveraged to meet key strategic goals. Using data from 168 franchisors, we found that relational (i.e., interfirm trust and knowledge‐sharing routines), but not franchisor‐owned (i.e., brand reputation and operating routines), strategic assets influence the proportion franchised. The study offers preliminary evidence that resource‐based theory has merit as a complementary explanation for franchising.

Suggested Citation

Gillis, William and Combs, James G. and Ketchen, David J., Using Resource‐Based Theory to Help Explain Plural Form Franchising (May 2014). Entrepreneurship Theory and Practice, Vol. 38, Issue 3, pp. 449-472, 2014, Available at SSRN: https://ssrn.com/abstract=2423145 or http://dx.doi.org/10.1111/etap.12008

William Gillis (Contact Author)

University of South Alabama - Department of Management ( email )

United States

James G. Combs

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States

David J. Ketchen

Auburn University ( email )

Auburn, AL 36849
United States

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