Is the theory of entrepreneurship applicable to franchising?

Abstract

This essay takes an entrepreneurship viewpoint toward franchising. The applicability of the general theory of entrepreneurship presented by Shane (“A general theory of entrepreneurship. The individual-opportunity nexus”. Edward Elgar, Cheltenham, 2003) is explored in the franchising context. Shane introduced a model of the entrepreneurial process in response to the failure of prior research to provide one. According to Shane, prior research has tended to look at only part of the entrepreneurial process, with the result that no general theory of entrepreneurship has been developed. Studies that consider franchising as a form of entrepreneurship are rare, as are studies on the entrepreneurial process of a franchisee. This conceptual study examines whether Shane’s framework is applicable to franchising research, and why. The proposals put forward here have implications for franchising researchers, franchisors, people interested in becoming franchisees, and for organisations planning to franchise their business.