Chapter

Networks, Alliances, and Survival

Peter M. Birkeland

in Franchising Dreams

Published by University of Chicago Press

Published in print May 2002 | ISBN: 9780226051901
Published online February 2013 | e-ISBN: 9780226051925 | DOI: http://dx.doi.org/10.7208/chicago/9780226051925.003.0007
Networks, Alliances, and Survival

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This chapter deals with the causes for differential franchisee success. It also specifically covers the critical role that social capital plays in franchisee performance. The social capital within franchise systems extends to five basic relationships—franchisor–franchisee, franchisee–franchisee (peer-to-peer), kinship network, franchisee–customer, and franchisee–supplier. The first three relationships affect the franchisee survival and profits. Relationships among franchisees are difficult to develop and sustain. The factors that limit the development of social capital within franchisee networks are then explained. The profile of a successful franchisee requires high degrees of social capital. The dense and extensive kinship networks that characterize franchising can result to severe management problems for franchisors. Franchise companies have retained the family enterprise, which is one of the oldest organizational forms in existence.

Keywords: franchisee success; social capital; franchisor–franchisee; peer-to-peer; kinship network; franchisee–customer; franchisee–supplier; franchising; family enterprise

Chapter.  7640 words. 

Subjects: Organizations

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