A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France, and Brazil

Article excerpt

Introduction

The intriguing issue of plural forms in franchising has received consistent research attention from franchising scholars ever since Harrigan (1984) introduced the concept of tapered integration to the strategy literature. Both conceptual writings (e.g., Dant, Kaufmann, and Paswan 1992; Bradach and Eccles 1989) and empirical articles (e.g., Dant and Kaufmann 2003; Lafontaine and Shaw 1999; Bradach 1997; Lafontaine and Kaufmann 1994) have attempted to expound on this relatively new notion of stable dual distribution. Much of this literature is based on theoretical perspectives derived from the North American experience.

Earlier accounts of franchising were driven by either support or refutation of the ownership redirection hypothesis (cf. Oxenfeldt and Kelly 1968), which envisioned nearly pure, fully company-owned systems for older, resource-flush franchise systems in the steady state, whereas the plural forms account of franchising recognizes the synergies to be derived from simultaneously maintaining a mix of both company-owned and franchised units in the system. In effect, then, the plural forms thesis (operationally, a collection of theoretical perspectives nested within the general concept of tapered organizations proposed by Dant, Paswan, and Kaufmann 1992; Bradach and Eccles 1989; Harrigan 1984) phenomenologically reconciles the theory with much of the contemporary franchising reality, where the plural form is widely used. Consequently, the plural forms thesis can legitimately be portrayed as the successor to the ownership redirection thesis, which has been one of the main preoccupations of the franchising scholars for over 35 years. As with most nascent theories, considerable articulation of the framework remains to be accomplished both from grounded descriptive literature and empirical investigations. This paper is offered as a contribution to the empirically grounded cross-cultural description of the plural forms phenomenon.

The vast majority of previous investigations of plural form have all been single-country investigations. For instance, Lafontaine and Shaw (1999), Dant and Kaufmann (2003), and Ehrmann and Spranger (2004) focused their investigations within the U.S. market, whereas Cliquet (2000), Lopez and Gonzales-Busto (2001), Windsperger (2004b), and Windsperger and Dant (2006) have investigated different European markets, while Frazer (2001) was focused on the Australian experience. The sole exception to this pattern is a recent exploratory analysis comparing French and Brazilian franchising case studies (Azevedo and Silva 2005), underscoring the need for mounting a data-driven cross-cultural investigation of the plural forms phenomenon such as being attempted in the present paper.

As explained by Bradach (1998), the plural form model within a franchising context is aimed at meeting four managerial challenges related to (1) spatial expansion; (2) brand protection; (3) reaction against competition; and (4) service and/or product concept evolution. It was first empirically defined within a franchising context through an exploratory research carried out in the U.S. restaurant industry (Bradach 1997). Several articles on this phenomenon have attempted to compare plural forms or tapered integration with other theoretical approaches such as the signaling theory (cf. Gallini and Lutz 1992) and the resource-based theory (cf. Dant and Kaufmann 2003), or the property rights and transaction cost theories (Windsperger and Dant 2006; Windsperger 2004a, 2004b), or the theory of incentives and the agency theory (Chaudey and Fadario 2004). Other related articles have focused on particular elements of the larger nomological network surrounding the plural forms phenomenon such as innovation (Cliquet and Nguyen 2004; Lewin-Solomons 1999), the organizational learning process (Sorensen and Sorensen 2001), or the royalty rate (Penard, Raynaud, and Saussier 2003). Ehrmann and Spranger (2004) have attempted to examine the cost reduction, quality enhancement, growth stimulation, and optimized risk control related to the plural forms whereas Cliquet (2000) has sought to examine the advantages and drawbacks associated with plural form networks within the context of hotels industry, the bakery sector, and retail cosmetics distribution in France. …