Research Article

Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry

Volume: 3 Number: 3 December 31, 2021
TR EN

Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry

Abstract

This study aims to address strategic and contractual dynamics of franchising, in consideration of arguments of transaction cost theory and agency theory. By using pooled cross-sectional data on a sample of Spanish food and beverage franchise systems of year 2021, gathered from Guia de Franquicias manual, exploratory analyses on the effect of franchisors’ age and total size on their proportion of franchised units are conducted as a first step. Furthermore, the effects of characteristics of a franchise system - its age, total size, origin country and proportion of franchised units, on its franchising contract’s financial determinants – level of initial investment, entry fee, royalty rate and advertising rate, are hypothesized and analyzed. Proportion of franchised units’ correlations with both age and total size characteristics are found to be inverse U-shaped. By applying multiple regression method, it is shown that none of franchising characteristics, age, total size, being foreign and its proportion of franchised units, play a significant role on level of entry fees and royalty rates, but their effects on initial investment level and advertising rates are significant, except total size.

Keywords

References

  1. Alon, I. (2001). The Use of Franchising by U.S.-based Retailers. Journal of Small Business Management, 39, 111-122.
  2. Altinay, L. (2006). Selecting Partners in an International Franchise Organization. International Journal of Hospitality Management, 25, 108-128.
  3. Andrew, W.D., Damitio, J.W., Schmidgall, R.S., (2007). Financial Management for the Hospitality Industry. New Jersey: Pearson Prentice Hall.
  4. Bai, C. & Tao, Z. (2001). Contract Mix in Franchising. Journal of Economics and Management Strategy, 9, 85-113.
  5. Berkovitz, J. (1999). An Analysis of Contract Provisions in Business Format Franchise Agreements: In John Stanworth, David Purdy (eds.), Proceedings of the 13th Conference of the International Society of Franchising.
  6. Bradach, J.L. (1997). Using the Plural Form in the Management of Restaurant Chains. Administrative Science Quarterly, 42, 276-303. Brickley, J.A., & Dark, F.H. (1987). The Choice of Organizational Form: The Case of Franchising. Journal of Financial Economics, 18, 401-420.
  7. Brickley, J., Dark, F., & Weisbach, M. (1991). An Agency Perspective on Franchising. Financial Management, 20, 27-35.
  8. Carney, M., & Gedajlovic, E. (1991). Vertical Integration in Franchise Systems: Agency Theory and Resource Explanations. Strategic Management Journal, 12(8), 607-629.

Details

Primary Language

English

Subjects

Business Administration

Journal Section

Research Article

Publication Date

December 31, 2021

Submission Date

September 23, 2021

Acceptance Date

November 26, 2021

Published in Issue

Year 2021 Volume: 3 Number: 3

APA
Ardoğan, A. R. (2021). Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry. Ekonomi İşletme Ve Maliye Araştırmaları Dergisi, 3(3), 243-262. https://doi.org/10.38009/ekimad.999517
AMA
1.Ardoğan AR. Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry. EKİMAD. 2021;3(3):243-262. doi:10.38009/ekimad.999517
Chicago
Ardoğan, Ahmet Rutkay. 2021. “Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry”. Ekonomi İşletme Ve Maliye Araştırmaları Dergisi 3 (3): 243-62. https://doi.org/10.38009/ekimad.999517.
EndNote
Ardoğan AR (December 1, 2021) Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry. Ekonomi İşletme ve Maliye Araştırmaları Dergisi 3 3 243–262.
IEEE
[1]A. R. Ardoğan, “Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry”, EKİMAD, vol. 3, no. 3, pp. 243–262, Dec. 2021, doi: 10.38009/ekimad.999517.
ISNAD
Ardoğan, Ahmet Rutkay. “Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry”. Ekonomi İşletme ve Maliye Araştırmaları Dergisi 3/3 (December 1, 2021): 243-262. https://doi.org/10.38009/ekimad.999517.
JAMA
1.Ardoğan AR. Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry. EKİMAD. 2021;3:243–262.
MLA
Ardoğan, Ahmet Rutkay. “Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry”. Ekonomi İşletme Ve Maliye Araştırmaları Dergisi, vol. 3, no. 3, Dec. 2021, pp. 243-62, doi:10.38009/ekimad.999517.
Vancouver
1.Ahmet Rutkay Ardoğan. Strategic and Contractual Dynamics in Franchise Systems: An Analysis on Spanish Food and Beverage Industry. EKİMAD. 2021 Dec. 1;3(3):243-62. doi:10.38009/ekimad.999517