Effect of New Regulation on Franchising Performance: An Exploratory Study in Spain

  • Victoria Bordonaba-Juste
  • Laura Lucia-Palacios
  • Yolanda Polo-Redondo
Part of the Contributions to Management Science book series (MANAGEMENT SC.)


Compulsory franchising regulation in Spain was introduced in 1998. Until then, franchising had had no specific regulation and was regulated by general commercial laws. This paper examines the effect of the change from a general regulation to a franchise-specific legislation on survival rates and discontinuance rates in the Spanish market. We use a descriptive methodology and a comparison between survival curves. After controlling for time-in-market, results suggest that, after regulation, there is an increase in the organizational failure rates but a decrease in discontinuance rates. Furthermore, regulation affects foreign franchisors slightly more negatively than domestic ones and the reaction of growing firms is different from that of firms with negative growth.


Domestic Firm Discontinuance Rate Legal Environment Franchise System Spanish Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  • Victoria Bordonaba-Juste
  • Laura Lucia-Palacios
    • 1
  • Yolanda Polo-Redondo
  1. 1.Marketing DepartmentUniversity of ZaragozaHuescaSpain

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