Protecting franchise chains against weather risk: A design science approach

Franchisees are often small business owners whose sales, profitability, and financial equilibrium in the first years of operation increasingly being impacted by weather variability. The literature has analysed effectiveness various guarantees offered franchisors franchise agreements, but case hedging local risk to which each franchisee is exposed never been addressed. Using Design Science, we show that operating one activities among 70% activity sectors risks, can support setup franchises, measure their incorporate protections against consequences adverse agreement. By doing this they reduce distress, provide an innovative service, reinforce quality relationship with franchisees.