The Influence of Relational Embeddedness on the Formation and Performance of Social Franchising

Abstract

This article investigates the novel interorganizational format named social franchising that has emerged as a possible solution to tackle the issues of growth and financial sustainability that social enterprises face, to enhance the alleviation of poverty and of other pressuring social issues, and to address the need of many governments to reduce fiscal deficits. We explore the issue of social franchising through case study analyses of four social franchises active in the United Kingdom from a social network theory perspective and through the argument of embeddedness. The influence of relational embeddedness and its eight core variables were found to play the preeminent role in the formation, partner selection, and performance and were examined. In addition, the study showed that the biggest challenges that social franchisors face are the creation of a straightforward clear model, the training of the partners to a different operationally wise and commercially wise culture, and their ability to focus on supporting the whole network.