Abstract
This study draws on the entrepreneurial process literature to develop a theoretical framework through which the international expansion of multiunit franchising can be better understood. We argue that through social capital accumulation, especially at the level of the individual franchisee, multiunit franchisees are able to overcome some of the significant challenges associated with operating multiple units, often across vast distances and in diverse cultural and institutional settings. We build on the ‘social capital theory of the firm’ to develop specific theoretical mechanisms pertaining to the roles of structural, relational, and cognitive social capital at the individual multiunit franchisee level in value creation at both the multiunit franchisee and multiunit franchisor levels. Based on our conceptual analysis, we propose a number of propositions, along with a multi-level theoretical framework, which can serve as a guide for future empirical research. We conclude by offering various implications for theory, for policy, and for practice.