Franchising Agreements and Organizational Performance of Multinational Corporations: A Synthesis of Theory, Evidence, and Strategic Implications
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Date
2026-03-06
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AE-FUNAI JOURNAL OF MANAGEMENT SCIENCES, Faculty of Management Sciences, Alex Ekwueme Federal University Ndufu Alike, Ebonyi State.
Abstract
Franchising agreements in multinational corporations often lead to challenges in maintaining
consistent brand standards and operational control across diverse markets. These issues can
negatively impact organizational performance by diluting brand equity and creating operational
inefficiencies due to the franchisor's limited direct oversight. This study investigated the impact
of franchising agreement on organisational performance of multinational corporation with
special emphasis on Nigerian bottling company, Ilorin, Kwara state. The study employed crosssectional survey research design. The study further utilized questionnaires to collect primary
data from ninety-three employees of Nigerian bottling company, Ilorin, Kwara state. A total of
93 copies of questionnaires were distributed and retrieved for data analysis. Standard multiple
regression was employed to analyze the data. The findings indicated that cultural adaptation
showed a significant relationship with organisation performance (β = .453, t = 5.279, p < 0.05),
and territory right and marketing protection also exhibited a positive and significant
relationship with customer relationships (β .687, t = 7.680, p = 0.000). The study concluded
that MNCs that effectively adapt their franchising agreements to the local culture of the host
country tend to achieve superior financial and operational performance and clear and
unambiguous delineation of territorial rights and robust marketing protection within the
agreement significantly boosts franchisee confidence and commitment. The study recommends
that MNCs should develop a flexible framework that allows for country-specific modifications
and the establishment of a transparent conflict resolution mechanism in a clear and well-defined
process for dispute resolution, which should be a core component of every franchise agreement.
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Adebayo, A. A. (2025). Franchising Agreements and Organizational Performance of Multinational Corporations: A Synthesis of Theory, Evidence, and Strategic Implications. Journal of Management Sciences, Faculty of Management Sciences, Alex Ekwueme Federal University Ndufu Alike, Ebonyi State. 10(2), 261-275.