A Preliminary Investigation Of Ownership Conversions In Franchised Distribution Systems

Abstract

Franchised business networks consist of corporately management and independently owned channel outlets. This analysis employs transaction cost economics and agency theory to explain net ownership shifts between franchisors and franchisees. Hypotheses are developed and a preliminary test is made using secondary data. The results indicate that net conversions to franchisor ownership are associated with quality control factors, projected growth, and revenues.