12 8月 2026
Research
Marketing
Prof. Zheng Xu
Published in Journal of Marketing, June 2026
Why do some franchise outlets weather economic crises better than others? In her research, Professor Vivian ZHENG Xu from the Department of Marketing examines how the governance of franchise clusters influences outlet survival during periods of economic adversity. The study reveals that the way franchisors structure ownership and supervise outlets can significantly affect resilience when market conditions deteriorate. By uncovering the governance mechanisms that help or hinder survival, the research offers valuable guidance for franchise brands seeking to strengthen their networks in challenging economic environments.
WHY: Franchise outlets often operate in geographic clusters to improve efficiency and market coverage. While clustering can create strategic advantages, little is known about how clustered outlets can be managed effectively during economic downturns, when business failures become more likely.
WHAT: The study investigates two important governance mechanisms within franchise clusters: franchisee ownership fragmentation, which reflects the diversity of ownership and knowledge sources within a cluster, and franchisor on-site supervision, which reflects the degree of oversight and control exercised by the franchisor. The research examines how these mechanisms influence outlet survival under adverse economic conditions.
WHERE: The findings advance research on franchising, marketing strategy, and business resilience while providing practical insights for franchisors managing geographically clustered outlets. The study is particularly relevant for retail and service businesses seeking to improve performance and sustainability during periods of economic uncertainty.
HOW: Using a novel clustering algorithm and survival analysis, the study analyzes a unique dataset of 8,677 franchise outlets across 18 franchisor systems over a 14-year period. The results show that during economic downturns, ownership fragmentation can reduce outlet failure risk in dense clusters by fostering greater diversity of knowledge and experience. In contrast, intensive franchisor on-site supervision can increase failure risk by limiting franchisee autonomy. The research also introduces FranClusterer, a practical app-based tool that helps franchisors identify clusters and make more effective governance decisions to enhance outlet survival.