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By Jeffrey L. Bradach

Specialists are expecting that by way of the 12 months 2000, an mind-blowing 50 percentage of all retail revenues will go through a franchise chain. but, for all its becoming significance, the franchise phenomenon continues to be principally undocumented and poorly understood, with little or no grounded perception to be had at the administration demanding situations that chains face. Now, along with his landmark publication "Franchise Organizations", Jeffrey Bradach fills this void with a penetrating examine the foremost elements that form a franchise's luck. utilizing compelling examples from significant eating place chains, together with KFC, Pizza Hut, Hardee's, and Jack within the field, Bradach extracts the components that make for a thriving firm. transparent and fascinating, this is often crucial examining for knowing and handling ultra-modern franchise company.

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Extra resources for Franchise organizations

Sample text

It became clear to me that viewing company and franchise arrangements as autonomous entities ignored some of the most important ways these arrangements contributed to overall organizational performance. I studied five major restaurant chains: KFC (formerly known as Kentucky Fried Chicken), Pizza Hut, Hardee's, Jack in the Box, and Fishermen's Page 12 Landing* (see Table 1-2). The three largest chains in the sample were among the four largest chains in the United States in terms of revenue in the early 1990s; the other two, Jack in the Box and Fishermen's Landing, were ranked in the top 50.

Conclusion: Characteristics of Restaurant Chains The shared identity of units; the local production of products, services, and plant; and the use of small and geographically dispersed units combine to create a complex set of management challenges for managers. Yet these dynamics are not often discussed in the existing literature on organizations. 4 While the Page 21 internal operation of a restaurant displays a high degree of specializationin fact, it might be viewed as the modern-day version of Adam Smith's pin factorythe relationship among units in a chain displays a different organizing principle.

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.

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