1 EXPLORING THE REASONS WHY FRANCHISORS DISCONTINUE FRANCHISING IN FAVOUR OF ALTERNATIVE METHODS OF OPERATION

This paper provides a preliminary analysis of the strategic management decision of franchisors to discontinue franchising arrangements in favour of an alternative method of ownership. A sample of 14 ex-franchisors and 7 of their ex-franchisees was interviewed to gather data on reasons and outcomes of the decision to cease franchising arrangements. The data analysis indicates that in general the firms were attracted to franchising because of resource constraints. However, the decision to adopt an alternative ownership strategy appears to be based on problems associated with human capital such as difficulties monitoring and motivating franchisees, and economic factors such as the downturn in the economy during the 1990s