The Use of Knowledge Transfer Mechanisms in Franchising

In this paper, we try to explain the use of knowledge transfer mechanisms in franchising firms by applying the knowledge-based view of the firm that integrates results from the information richness theory. Starting from the information richness theory we argue that the degree of tacitness of system-specific knowledge determines the information richness of the knowledge transfer mechanisms of franchising firms. We examine the following hypotheses: (1) the franchisor uses more knowledge transfer mechanisms with a lower degree of information richness (such as email, intra- and internet), if the tacitness of system-specific knowledge is low, and (2) the franchisor uses more knowledge transfer mechanisms with a higher degree of information richness (such as training, seminar, meetings, visits), if the tacitness of system-specific knowledge is high. We test these hypotheses by using data from 83 franchising firms in the Austrian franchise sector. The data provide partial support for the hypotheses