Opening the black box of capabilities to renew the organizational and business know-how of franchises

PurposeThe purpose of this paper is to investigate the relationship between capabilities and renewal of organizational and business know-how in franchise networks.Design/methodology/approachThis work uses a comparative case study of adaptive, absorptive and innovative capabilities to investigate knowledge renewal in 16 franchise networks.FindingsThe findings show that adaptive and innovative capabilities complement each other to foster know-how renewal. Furthermore, networks without internal R&D need to mobilize adaptive, absorptive and innovative capabilities to renew both organizational and business know-how. The findings also highlight that the three capabilities are interconnected.Research limitations/implicationsThe results of this research could provide insights for franchise networks to regenerate their knowledge base and ensure their long-term survival.Originality/valueThe underlying capabilities that explain organizational and business know-how renewal in franchises have not been investigated.