New challenges in franchisor-franchisee relationship. An analysis from agency theory perspective

Guillermo Navarro Sanfelix and Francisco Puig

Cuadernos de Gestión, 2017

Abstract: [EN] Agency theory has been widely used in the franchising literature. This theory analyzes the contract relationships between the principal and agent and has been mostly applied to franchising in traditional sectors (e.g., restaurants, retailing, or travel agencies) where the processes and procedures can be easily standardized. Recently, there has been a spectacular development of high-intensity knowledge sectors, especially in the health sector (dentists, opticians, physiotherapists etc.), where many companies choose franchising to expand the network and improve the survival rates of franchisees, although this strategy goes against the traditional view of the agency theory. In this work, we propose to study this “new agency problem”, using the franchising business model as our research field. The know-how in high-knowledge-intensive sectors is difficult to codify and transfer, and it opens new possibilities for resource-based and intellectual capital perspectives to explain how knowledge assets are built into contracts in franchisor-franchisee relationships. Using resource-based theory and an intellectual capital perspective, we develop propositions on how to handle the knowledge transfer more efficiently. From this point of view, we propose an interorganizational dynamic contract to provide a more efficient knowledge transfer, thereby contributing to the success of the franchise networks as well as reducing the failure rates of franchisees’ outlets.

Keywords: franchise; agency theory; entrepreneurship; resource-based view; franquicia; teoría de la agencia; emprendimiento; teoría de recursos y capacidades (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://addi.ehu.eus/handle/10810/24429 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehu:cuader:24429

Ordering information: This journal article can be ordered from
Instituto de Economía Aplicada a la Empresa, Revista Cuadernos de Gestión, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
https://ojs.ehu.eus/index.php/CG

Access Statistics for this article

Cuadernos de Gestión is currently edited by Pilar Fernández

More articles in Cuadernos de Gestión from Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE) Instituto de Economía Aplicada a la Empresa Avda Lehendakari Aguirre 83 CP 48015 Bilbao (Vizcaya) Spain. Contact information at EDIRC.
Bibliographic data for series maintained by Alcira Macías Redondo ().