Master Franchising and System Growth Rates

Master franchising is employed by a large proportion of franchise systems. Although the impact of master franchising on the control of franchise systems, and thus their operational efficiency, is equivocal, it has been consistently linked with increased growth rates. In this study of 169 franchisors, we explore the relationship between system growth rates and the use of master franchising. Although causation is not tested, the results indicate that the use of these more complex organizational forms is associated with higher system growth rates. Other related findings are reported and discussed.