Franchising Strategies in Startups: Building an Analytical Framework

Abstract Startups are a contemporary business model that repeatedly presents issues related to financial constraints. Recently, the adoption of franchising emerged as a possibility for startups. This study adopts a novel approach in the startup literature to explain the decision-making process for startups formulating franchising strategies. Additionally, an exploratory framework of this process was designed. Multiple-case studies on Brazilian startups that operate through franchised units were carried out. For startups that operate through conventional franchises, the use of third-party capital is predominant, while for those that operate with micro franchises the lack of an employment relationship is determinant.