Jeffrey L. Bradach - Franchise organizations

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title	:	Franchise Organizations
author	:	Bradach, Jeffrey L.
publisher	:	Harvard Business School Press
isbn10 | asin	:	087584832X
print isbn13	:	9780875848327
ebook isbn13	:	9780585301723
language	:	English
subject	Chain restaurants--Management, Franchises (Retail trade)--Management.
publication date	:	1998
lcc	:	TX911.3.M27B72 1998eb
ddc	:	647.95/068/8
subject	:	Chain restaurants--Management, Franchises (Retail trade)--Management.

Page iii Franchise Organizations Jeffrey L. Bradach

Page iv Some images in the original version of this book are not available for inclusion in the netLibrary eBook. Copyright 1998 President and Fellows of Harvard College All rights reserved Printed in the United States of America 02 01 00 99 98 5 4 3 Library of Congress Cataloging-in-Publication Data Bradach, Jeffrey L Franchise organizations / Jeffrey L. Bradach p. cm Includes bibliographical references and index. ISBN 0-87584-832-X (alk. paper) 1. Chain restaurantsManagement. 2. Franchises (Retail trade) Management. I. Title. TX911.3.M27B72 1998 647.95'068'8dc21 97-28868 CIP The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.49-1984.

Page v Contents Preface and Acknowledgments vii 1 Introduction 1 2 The Management Challenges Facing Restaurant Chains 15 3 Building Blocks of Chain Organizations: Company and Franchise Arrangements 31 4 Unit Growth 61 5 Uniformity 83 6 Local Responsiveness 111 7 Systemwide Adaptation 133 8 Conclusion 167 Appendixes A The Literature on Owning or Franchising 187 B The Research Design 191 C The Role of the Field Visit 195 Notes 201 References 219 Index 229 About the Author 238

Page vii Preface and Acknowledgments This book represents the culmination of an in-depth study of the management of chain organizations. Although we patronize local units of national chains every dayMcDonald's, Pizza Hut, Starbucks, Holiday Inn, and Texaco gas stations, to name just a fewwe tend to forget that these local units are part of systems that often span the United States, and sometimes even reach across the globe. Despite the fact that chain organizations pervade the business landscape, little has been written about this way of conducting business. The primary aim of this book is to present a model of management for chain organizations. I originally became interested in chain organizations because they are a good example of a compelling practical and theoretical problem: Why do firms make or buy certain activities? Chain-restaurant organizations are fertile ground for studying this question because, as we shall see, most large restaurant chains consist of company-owned or franchised unitsa variation of the make-or-buy choice. What I quickly learned, though, was that executives of chains did not see this as an "either-or" decision; indeed, most large chains both owned and franchised their restaurants. Even more interesting was the observation of executives and franchisees that the two sides of a chain affected each other in a variety of ways. It was at this point that I decided to shift the focus of the research from the simple question of own-or-franchise to the broader and more basic question of how chain-restaurant organizations are managed to achieve their objectives. The primary idea I develop in this book is that the simultaneous use of these two different arrangementsan organizational configuration I label the plural formenables a set of processes that strengthens each arrangement and makes the whole more than the sum of the parts. Drawing on my in-depth study of five large restaurant chains, this book lays out a model of management that is built on the processes enabled by the plural form. While one must be careful when generalizing from such a small sample, this approach offers fresh insights into why chains use company and

Page viii franchise arrangements. More broadly, the book illuminates an important form of organization that has gone largely unnoticed, offering a new perspective for understanding the behavior and performance of other complex organizational designs that involve the use of internal and external relationships.

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