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Microfranchising in Base-of-the-Pyramid Markets: Institutional Challenges and Adaptations to the Franchise Model

Authors


Geoffrey M. Kistruck, tel.: (614) 688-4107; e-mail: kistruck_1@fisher.osu.edu, to Justin W. Webb at justin.w.webb@okstate.edu, to Christopher J. Sutter at sutter_70@fisher.osu.edu, and to R. Duane Ireland at direland@mays.tamu.edu.

Abstract

Microfranchising has attracted interest as a potential strategy for rapid scaling within base-of-the-pyramid (BOP) markets. However, our findings suggest that while microfranchising might provide a number of social benefits to microfranchisees and underserved communities, the institutional contexts that characterize BOP markets create a number of significant challenges to the economic sustainability of the microfranchisor and the overall microfranchising model. Simultaneously, our data also suggest several unique adaptations to the microfranchising model that might help mitigate the institutional challenges associated with agency concerns, resource scarcity, and branding/standardization within BOP markets.

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