Franchising choice in retail networks: a multi-level institutional framework

Franchising is one of the most dynamic forms of organization for retail networks. Conceptualized as a hybrid form by transaction cost theory, franchising outlets are supposed, in the long run, to be bought by franchisors in order to capture residual rents. However, franchising persists a long time and still represents one of the favorite means to cover territories. This article suggests that this persistence of franchising in the organization of retail networks can be explained by institutional theory. The article also argues that institutional forces exert their influence at multiple levels. Based on this, a set of seven research propositions are developed, setting out a research agenda in this area