Can Franchisors Balance Adaptation and Standardization? Toward Theorizing Ambidexterity in Franchisors

Franchising is a growth strategy in which franchisors grant other parties the right to use their brand, processes and value propositions in different geographical places. Consistency in products and services across different branches is considered as a prominent feature of this business model. This; however, may diminish the firm’s ability to adapt to local preferences. Accordingly, one of the main challenges franchisors are encountered is how to achieve a decent balance between adaptation and standardization activities. While the literature of franchising provides less insights into the way franchisors can mitigate this tension, building on the literature of organizational ambidexterity this research theorizes potential factors enabling franchisors to be the so-called ambidextrous firms. We propose that plural form, portfolio network management, diversity in target markets, and strategic orientations can enhance a franchisor's ability for adaptation-standardization duality. This opens novel paths for research aiming to enhance our understanding of the way franchisors can improve their performance.