Making Franchising in Healthcare Work

Abstract

Business format franchising is a form of interorganizational cooperation that originates from the business sector. It is increasingly used in a variety of healthcare services to reach positive results. In a franchise system contractual arrangements are made between two firms: the franchisor and the franchisee. In exchange for a payment, the franchisor offers a business format that consists of a brand name, support systems, and a specification of the healthcare services that must be delivered in local units. Franchisees provide healthcare services in local units using the business format, the own local market knowledge, and the own resources (Blair & Lafontaine, 2005; Falbe & Welsh, 1998; Komoto, 2005). Thus, franchising combines central management of a business format and local entrepreneurship (Cox & Mason, 2007; Sorenson & Sørensen, 2001). Some franchise systems also include units owned by the franchisor. These units are operated by managers that are employed by the franchisor and that use the same business format as the franchisees. So, a franchise system consists of a franchisor, the franchisees, the business format, the franchise contract and, in some systems, unit managers with the company-owned units they operate (Croonen, 2005). In this thesis the concept ‘unit actors’ is used to commonly refer to franchisees and unit managers (including their units), while the terms ‘franchisees’, ‘unit managers’ and ‘professionals’ are used to refer to actor groups separately. Franchising is stated to be a promising model for the healthcare sector.