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Franchising DreamsThe Lure of Entrepreneurship in America$
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Peter M. Birkeland

Print publication date: 2002

Print ISBN-13: 9780226051901

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226051925.001.0001

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Networks, Alliances, and Survival

Networks, Alliances, and Survival

(p.116) Chapter 7Networks, Alliances, and Survival
Franchising Dreams

Peter M. Birkeland

University of Chicago Press

This chapter deals with the causes for differential franchisee success. It also specifically covers the critical role that social capital plays in franchisee performance. The social capital within franchise systems extends to five basic relationships—franchisor–franchisee, franchisee–franchisee (peer-to-peer), kinship network, franchisee–customer, and franchisee–supplier. The first three relationships affect the franchisee survival and profits. Relationships among franchisees are difficult to develop and sustain. The factors that limit the development of social capital within franchisee networks are then explained. The profile of a successful franchisee requires high degrees of social capital. The dense and extensive kinship networks that characterize franchising can result to severe management problems for franchisors. Franchise companies have retained the family enterprise, which is one of the oldest organizational forms in existence.

Keywords:   franchisee success, social capital, franchisor–franchisee, peer-to-peer, kinship network, franchisee–customer, franchisee–supplier, franchising, family enterprise

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