It takes two to tango: A taxonomy of franchise success determinants

Abstract

PurposeThe authors conduct a structured analysis of the literature on the determinants of economic and financial franchise performance and develop an integrative framework that unifies the literature from franchisor as well as franchisee perspectives.Design/methodology/approach53 relevant research articles on economic and financial franchise success published between 1976 and 2020 were identified. After providing an overview of the empirical methods and theoretical perspectives found in the literature, an original classification system of franchise success determinants was developed.FindingsMore than 50 different variables impacting economic or financial franchise success were identified and grouped into ten distinct categories. The most impactful categories are the franchise relationship, franchisee characteristics and capabilities, franchisor variables and the franchise environment. The study’s integrative framework illustrates not only the impact of these factors on franchise success, but also reveals which areas require more attention.Research limitations/implicationsAs the study focused on understanding the determinants of franchise success, any measures related to franchise failure were excluded. Also, the role of venture capital and stock market listing as growth strategies in the franchise sector were excluded.Practical implicationsThe study’s framework shows how the management of franchise success is complex and that franchise relationship, franchisee and franchisor variables as well as the franchise context need to be taken into account. It illustrates that there is a hierarchy with which these determinants should be prioritized.Originality/valueThe article proposes the first systematic review of the literature on the determinants of economic and financial franchise success. The contribution offers both, researchers and practitioners, new and useful insights for future knowledge development in the field.