Franchising is particularly present in industries in which human resources play a vital role. However, little is known about human resource management (HRM) in a franchising context. This study investigates HRM behavior and performance using a sample of 171 units within one plural retailing system. The results lend support to the agency and entrepreneurial perspectives; franchised units have a relatively low HRM intensity but superior HR performance. We also find a negative relationship between unit size and performance, moderated by type of unit ownership. We conclude that when it comes to HR performance, the units that are franchised and small are the most beautiful of all.
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Brand et al. (2010) studied this question.
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