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Trust and the tendency towards multi-unit franchising A relational governance view.pdf

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Trust and the tendency towards multi-unit franchising A relational governance view.pdf

Journal of Business Research 67 (2014) 2337–2345 Contents lists available at ScienceDirect Journal of Business Research Trust and the tendency towards multi-unit franchising: A relational governance view Michele Griessmair a, Dildar Hussain b,?, Josef Windsperger a a Department of Business Administration, University of Vienna, Oskar-Morgenstern-Platz 1, A-1090 Vienna, Austria b Department of Strategy Marketing, ESC Rennes School of Business, 2, rue Robert dArbrissel, 35065 Rennes, France article info Article history: Received 23 June 2013 Received in revised form 20 January 2014 Accepted 23 January 2014 Available online 21 February 2014 Keywords: Multi-unit franchising Relational view of governance Knowledge-based trust General trust Agency theory abstract Previous research mainly focused on the agency-theoretical explanation of multi-unit franchising (MUF). The aim of this study is to develop a relational governance perspective of MUF by investigating the role of knowledge-based trust and general trust in franchisors choice between multi-unit and single-unit franchising. Our data from the German franchise sector indicate that knowledge-based trust positively in?uences and general trust negatively in?uences the franchisors tendency towards multi-unit franchising. ? 2014 Elsevier Inc. All rights reserved. 1. Introduction Franchising is a complex governance form and franchisors have to choose among various ownership strategies within franchising (Bradach, 1997; Garg, Rasheed, Priem, 2005; Hussain, Perrigot, Mignonac, El Akremi, Herbach, 2013; Kaufmann Dant, 1996; Weaven Frazer, 2007). When the franchisors build their franchise network, they have to make an important decision regarding the use of single-unit franchising (SUF) and multi-unit franchising (MUF). SUF refers to the traditional “one franchisee–one outlet” format whereas MUF refers to an arrangement in which one franchisee can own two or more outlets in the same franchise system. They have to strike a ba