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Franchising

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Submitted By kostya28
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Abstract: This paper works out a conceptual framework for studying the performance of franchising networks. Franchising networks, which originally developed in the context of Western economies, are currently operating in transition economies as well. Some franchising networks fail and some succeed. The paper views performance of networks as a complex process of adaptation to the environment. Characteristics of networks, which appear due to the environment, influence the drivers of performance, i.e. the factors that are responsible for the networks’ success or failure. The paper is theoretical and makes use of different sources of evidence: empirical and theoretical studies on franchising and inter-organisational networks. The conceptual framework is finally tested on a small case study of two franchising networks operating in Russia. JEL-code: Franchising Networks, Performance, Flexibility, Information Exchange, Innovation and Learning Outline
I. Introduction 3
II. Definition of franchising networks 4
III. Institutional environment of a transition economy 5
IV. Performance of franchising networks 7 A. Flexibility 7 B. Information exchange 10 C. Innovation and learning 12
IV. Conceptual Framework 15 A. Sociological and Economic Traditions of Network Research 15 B. Economic Theories for the Study of Networks 16 C. Sociological Theories for the Study of Networks 17 D. Conceptual Framework for the study of Performance of Franchising Networks 20
V. Empirical case study 23
VI. Conclusions 23
VII. Bibliography 25

Introduction

With people waiting in line for three hours to get into the first McDonald’s restaurant opened in Moscow in 1990, the concept of franchising was brought to Russia. After almost a decade this concept does not sound unfamiliar any more. Lots of Western companies like McDonald’s, Alphagraphics,

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