Franchise Network Restructuring: Pressures, Constraints and Mechanisms

C.M. Mason, Juliet Cox

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Franchised businesses operate on the basis of granting individual franchisees trading rights to serve territories or market areas on either an exclusive or non-exclusive basis. The design of these territories is generally undertaken during the roll-out phase of the franchise. However, these territories and market areas may become sub-optimal over time, necessitating restructuring. But if the franchisor has granted exclusive rights to a territory then this is likely to involve a breach in the franchise contract. In cases where existing franchisees do not have exclusive territories they may nevertheless make a legal challenge to the creation of additional franchises on the grounds of encroachment. This paper - which is based on a study of 40 franchisors in the United Kingdom - examines how franchisors go about network restructuring in constrained and non-constrained situations. Franchisors typically did not act on their legal rights, echoing findings of earlier franchising studies which reveal a divergence between contractual rights and operational behaviour. This focus on network restructuring also provides new perspectives on the reasons for ownership reversion and the growth of multi-unit franchisees.
LanguageEnglish
Pages503-527
Number of pages24
JournalEntrepreneurship and Regional Development
Volume21
Issue number50
Publication statusPublished - 2009

Fingerprint

Franchise
Franchisor
Franchisee
Franchising
Breach
Divergence
Ownership
Encroachment

Keywords

  • franchising
  • growth
  • territories
  • encroachment
  • conflict
  • ownership reversion
  • multi-unit franchising

Cite this

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Franchise Network Restructuring: Pressures, Constraints and Mechanisms. / Mason, C.M.; Cox, Juliet.

In: Entrepreneurship and Regional Development, Vol. 21, No. 50, 2009, p. 503-527.

Research output: Contribution to journalArticle

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