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Franchising: a Literature Review on Management and Control Issues

In: Business and Management

Submitted By hadool88
Words 6954
Pages 28
Abstract
This article provides an overview of the recent literature on franchising, with special attention to management control issues. Based on an analysis of franchising articles published in twenty-five high-impact journals over the period 1996–2008, the literature is divided into the following three broad streams: franchise initiation and subsequent propensity to franchise, franchise performance and control of franchising relationships. Several research gaps and avenues for future research are identified, especially towards a systematic study of management control issues in the context of franchising relationships.
Key words: franchising, literature review, management control JEL-codes: D23 – L22 – L26 – M21 – M40
2
I. INTRODUCTION
This article provides an overview of the recent management literature on franchising, with special attention to its management controli aspects. Franchising plays a prominent role in business life today. This form of entrepreneurship is increasingly being adopted in a variety of sectors, especially by retailing and service companies such as McDonald’s, Holiday Inn, Body Shop and Benetton. According to the Deontological European Code of Honour (2004), franchising is a system for the sale of commodities, services and/or the application of technology. It is based on a close and continuing cooperation between juridical independent and financially autonomous companies, namely the franchisor and his individual franchisees. Hereby, the franchisor grants his franchisees the right and he puts them under the obligation to exploit a business in accordance with the business concept. Therefore, the franchisee pays the franchisor an initial franchising fee, periodical royalties and/or advertising fees. In return, the franchisee is granted the right to make use of the brand name, the trademark, the know- how, the commercial and technical...

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