A Comparison of Company Owned and Franchised Fast Food Outlet Performance: Insights from Health Inspection Scores

Organisational form and quality, service, and cleanliness inspection scores in restaurant franchise chains: Evidence from Spain

“…In sum, the results confirm that organisational form differences among the outlets in our two restaurant chains do not lead to differences in the three performance measures studied. This contradicts other findings in the hospitality literature, where authors have observed differences in performance between company‐owned and franchised restaurants (Beheler et al, ; Jin & Leslie, ; Krueger, ; Michael, ; Shelton, ; Sveum & Sykuta, ). These different results may be due to the fact that the performance variables used in some of these studies (Krueger, ; Shelton, ; Sveum & Sykuta, ) are different to our study's performance variables.…”

Influence of Organizational Form and Customer Type on Online Customer Satisfaction Ratings

“…Beheler, Norton, and Sen () examined performance differences between company‐owned and franchised units in the U.S. fast food industry. They concluded that franchised units had significantly higher ratings in health inspections, thus supporting the idea that operational standards are not only higher in franchised units but also that operational standards are more consistent than in company‐owned units.…”

“…Even though he found that revenues did not significantly vary between the two organizational forms, he argued that costs were higher and consequently profits were lower in companyowned units compared with franchised units. Beheler, Norton, and Sen (2008) examined performance differences between companyowned and franchised units in the U.S. fast food industry. They concluded that franchised units had significantly higher ratings in health inspections, thus supporting the idea that operational standards are not only higher in franchised units but also that operational standards are more consistent than in companyowned units.…”

“…Capital investment by the local franchisee should lead to less shirking as compared with company employees. Prior work supports this vertical agency argument (Beheler, Norton, and Sen 2008;Krueger 1991;Freedman and Kosová 2014). As such, franchisees should do a better job than managers of company-owned units in terms of monitoring their employees.…”

“…Other studies on the plural form have been carried out at the unit level. Several authors have compared company-owned units and franchised units in terms of performance (Anderson 1984;Kosová, Lafontaine, and Perrigot 2013;Shelton 1967), health inspection ratings (Beheler, Norton, and Sen 2008), hygiene scores (Jin and Leslie 2009), and price (Kosová, Lafontaine, and Perrigot 2013). Findings of these studies have been mixed; for instance, Kosová, Lafontaine, and Perrigot (2013) found no statistically significant differences between company-owned hotels and franchised hotels in terms of total sales, revenue per available room (RevPAR) and price when controlling for other hotel and market factors and endogenizing the choice of organizational form.…”