Abstract
This study investigates the factors explaining the franchisors choice between single-unit and multi-unit franchising based on agency theory and transaction cost theory. We examine the impact of behavioral uncertainty due to shirking and free-riding, franchisees transaction-specific investments, and environmental uncertainty on the franchisors choice of multi-unit franchising. Our empirical results from the German franchise sector provide strong support of the transaction cost hypotheses and relatively weak support of the agency-theoretical hypotheses. This study contributes to the literature by showing that the transaction cost explanation complements the agency cost explanation of multi-unit franchising.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
