Governance capabilities and relationship performance in international franchising

This paper investigates governance capabilities driving relationship performance of international franchisors. We collected data from internationalized French franchisors with a mixed-methods design. Interviews from Study 1 (N = 28) complemented previous literature and led to the proposed integrative model of governance capabilities. Questionnaire data from Study 2 (N = 94) was used to test the model with PLS-SEM. We find that two international communication capabilities, intercultural communication and communication adaptation, enhance performance directly, and indirectly through their impact on knowhow transfer, monitoring, and contract adaptation capabilities. The number of countries where the franchisor is present is negatively related to contract and communication adaptation.