Frontiers in European Entrepreneurship Research
- Frontiers in European Entrepreneurship series
Edited by Friederike Welter, David Smallbone and Anita Van Gils
Chapter 7: Knowledge Acquisition through Strategic Networks: The Case of Franchising
7. Knowledge acquisition through strategic networks: the case of franchising Maryse Brand, Evelien Croonen and Roger Leenders 1. INTRODUCTION In business format franchise relationships, a franchisor owns a ‘business format’ – including a uniform identity toward customers and extensive internal procedures – and replicates it by allowing small business owners (that is, franchisees) to use it in return for fees (Kaufmann and Eroglu 1998). The franchise relationship is embedded in a franchise chain consisting of the franchisor and its franchised and possible company-owned units that all operate under more or less the same business format. In the last decades, business format franchising has become an increasingly popular strategy for entrepreneurial wealth creation in different industries in various parts of the world (Welsh et al. 2006). In the US, franchising accounts for 46 per cent of the restaurant industry sales, 55 per cent in speciality food retailing and 71 per cent in printing and copying (Combs et al. 2009). In Europe the situation is similar; in the Netherlands, for example, franchising has a market share of 80 per cent in food retailing and 71 per cent in non-food retailing (Van Essen and Pleijster 2009). In recent years, different authors have used a knowledge or organizational learning perspective regarding business format franchising (for example, Darr et al. 1995; Ingram and Baum 1997; Jensen and Szulanski 2007; Kalnins and Mayer 2004; Sorenson and Sørensen 2001; Szulanski and Jensen 2006; 2008; Winter and Szulanski, 2001). These studies point out that franchisors typically codify their knowledge...
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