The role of absorptive capacity, social capital and managerial capabilities in franchise businesses (The case of Iranian fast-food franchisees)

During the last years, franchising strategy has been considered for developing and running a business in a variety of industries. Give the lack of franchisee perspective, and the importance of franchisee’s capabilities in demonstrating the better performance, this study examines the role of absorptive capacity, social capital and managerial capabilities in franchisees’ performance. By taking a quantitative approach, this study collected the data from 122 franchisees in fast-food industry in Iran. Structural equation modeling (Aarstad et al.), based on AMOS 22 software is used to analysis the data in the study. The result of the study shows absorptive capacity, social capital, and managerial capability significantly affects the franchisee’s performance. Moreover, environmental competitiveness moderates the relationship between absorptive capacity, managerial capabilities, and performance in franchised outlets.