Alternative modes of entry in franchising

Abstract

Franchising has been widely studied from the perspective of the franchisor-fraanchisee relationship and firms’ performance. Meanwhile, entry mode studies have explored various avenues for internationalization by the pace and method of expansion and the governance mode adopted. Companies have used mixed modes of expansion depending on the features of their domestic and international markets. One form of expansion is the store-in- store strategy, which some firms view as providing real estate revenue and others consider as part of their business model. The increased adoption of this entry mode provides a window for theory development that considers store-in-store franchising and internationalization. Accordingly, this paper draws upon relational contracting theory to develop a conceptual framework for store-in-store franchising using host department stores for the purpose of domestic and international expansion. We also report on a survey to provide managerial in- sights to company executives on the adoption of the store-in-store strategy.