The strategy of franchising has become an increasingly important growth option for firms operating in today’s highly competitive marketplace. This paper describes the present status of franchising and provides managers with practical, strategic guidance on its use. Three general forms of franchising have emerged which can be employed by the franchisor depending upon company objectives. It is also shown in this paper that a portfolio matrix model can act as a useful tool to aid decision‐makers in selecting and employing franchising strategies both domestically and in world markets.
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