Knowledge complexity, absorptive capacity and weak ties: An empirical analysis of its effects on franchise systems uniformity

The purpose of this paper is to analyze the effect of knowledge complexity, absorptive capacity and weak ties between franchisor and franchisee on standards compliance related to quality and operative procedures.

A franchisee outlets survey was carried out to investigate the effect of knowledge, franchisee and relationships characteristics on franchise systems uniformity. A linear regression analysis was conducted on a sample of franchisees from different franchise chains and sectors of activity operating in Spain. The authors also controlled for transformation type, which represents the kind of activities carried out in the franchisee units, whether just commercial or both transformative and commercial activities.

Partial support was found for the hypothesis. Knowledge complexity and absorptive capacity do not affect uniformity, although weak ties do affect it: the fewer weak ties, the greater franchise system uniformity. These results allow the authors to identify differences between outlets that carry out commercial and physical transformation activities and those in which only commercial activities are carried out. Specifically, uniformity is greater in outlets that perform both commercial and productive activities, and lower in outlets that only carry out commercial activities.

The paper shows that uniformity can be regarded as a source of competitive advantage in the context of franchise operations with multiple centres dispersed geographically.