Authors: João Mota; Luis M. de Castro; Sandra Marnoto
Franchising, especially business format franchising also known as the McDonalds approach has beenseen by practitioners and also by some academics simply as a straightforward approach for thecreation (and replication) of one’s own business – i.e. as one of the ways for entrepreneurship (andgrowth). Several trade associations were created for the promotion of this kind of business using acombination of “recipes for success” and entrepreneurial “bias for action”.The prevailing explanations for the franchising phenomena, especially the initiative of franchising, thepropensity to franchise, and franchise performance, are mostly based on two orders of reasons or acombination of them: franchising as a means to deal with resource scarcity and / or mechanism forfranchisor and franchisee to align incentives between both. However, empirical studies have shownlimited support for such claims, especially in face of the so called plural form. The mixed nature of theplural form, where proprietary units coexist with franchised units, seems to contradict predictions of aclear deterministic path in one or the other direction. Issued regarding learning processes in such“networks” have recently been brought in, as an attempt to capture other mechanisms that mayunderlie their operation and sustainability. It may also be argued that the traditional literature onfranchising has assumed a high level of homogeneity within and between franchising “networks”,possibly due to the perception that they tend to be “dominated” by a high level of standardization ofpractices, both operative and relational.This paper seeks to explore another perspective to look at franchising “networks”, by drawing from theliterature on capabilities and industrial networks. Seen from this perspective, business formatfranchising may involve more than the mere replication or exploitation of a recipe, especially if we takeinto consideration the partly idiosyncratic nature of both the relationships between actors and theircapabilities and intentions. In this framework, the experiences of the actors involved and not only thefranchisor, including those relative to relationships as mechanisms for the coordination and generationof new knowledge, may be relevant for a better understanding of the dynamics of a particular“network”. Additional sources of variety may be the need throughout time for the refinement of the“package”, in more than one ways, together with the gradual developing of the network, and thelearning experiences taking place in that context.
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