Opening the black box of capabilities to renew the organizational and business know-how of franchises

Purpose The purpose of this paper is to investigate the relationship between capabilities and renewal of organizational and business know-how in franchise networks. Design/methodology/approach This work uses a comparative case study of adaptive, absorptive and innovative capabilities to investigate knowledge renewal in 16 franchise networks. Findings The findings show that adaptive and innovative capabilities complement each other to foster know-how renewal. Furthermore, networks without internal R&D need to mobilize adaptive, absorptive and innovative capabilities to renew both organizational and business know-how. The findings also highlight that the three capabilities are interconnected. Research limitations/implications The results of this research could provide insights for franchise networks to regenerate their knowledge base and ensure their long-term survival. Originality/value The underlying capabilities that explain organizational and business know-how renewal in franchises have not been investigated.