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Franchise Network Restructuring: Pressures, Constraints and Mechanisms

Mason, C.M. and Cox, Juliet (2009) Franchise Network Restructuring: Pressures, Constraints and Mechanisms. Entrepreneurship and Regional Development, 21 (50). pp. 503-527.

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    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.

    Item type: Article
    ID code: 15813
    Keywords: franchising, growth, territories, encroachment, conflict, ownership reversion, multi-unit franchising, Commerce, Economics and Econometrics, Business and International Management
    Subjects: Social Sciences > Commerce
    Department: Strathclyde Business School > Hunter Centre For Entrepreneurship
    Related URLs:
      Depositing user: Miss Carol Ann Balloch
      Date Deposited: 15 Jan 2010 12:09
      Last modified: 04 Sep 2014 23:21
      URI: http://strathprints.strath.ac.uk/id/eprint/15813

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