The Effects of Ownership and Investment upon the Performance of Franchise Systems

Thomas, Wade L.; O'Hara, Michael J.; Musgrave, Frank W.

doi:10.1177/056943459003400106

Cited by 28 publications

(16 citation statements)

References 7 publications

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“…The modeling efforts related to the relative proportion of franchisee activity compared to that of company-owned units started in the mid-1980s. Based on a rather simplistic first model (O'Hara and Thomas 1986), Thomas, O'Hara, and Musgrave (1990) developed a model with the ratio of per unit sales in company-owned outlets and the per unit sales in franchisee-operated outlets as the dependent variable and a series of predictor variables. The main conclusion of the model, evaluated using 10 sectors of activity over a 10-year period, was that when there are too many company-owned units, losses are noticed.…”

Section: Econometric Modelsmentioning

confidence: 99%

A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France, and Brazil

Dant

Perrigot

Cliquet

2008

J Small Business Management

117

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This paper explores the phenomenon of plural forms (i.e., the simultaneous coexistence of franchised and company-owned outlets, operationally, the proportion of company-owned units in franchise systems based on literature, in franchising across three countries from three continents, namely the United States, France, and Brazil in what is ostensibly the first cross-cultural comparison of its kind. Based on 2003 secondary data, we carry out a series of inferentially grounded analyses involving the plural forms phenomenon from an exploratory perspective. Though subsequently, comparative regression models are also evaluated using eight purported determinants of the use of the plural forms, the essential character of the paper remains essentially exploratory. The results show that the proportion of company-owned outlets is almost three times greater in France and Brazil as compared to the United States. We also found that in the U.S. sample, three of the eight predictors significantly predict the occurrence of plural forms (namely, average total required investment and cash liquidity requirement have a negative impact, and company age has a positive impact); the French model was not statistically significant, whereas in the Brazilian

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Section: Econometric Modelsmentioning

confidence: 99%

A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France, and Brazil

Dant

Perrigot

Cliquet

2008

J Small Business Management

117

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“…This view is supported by Martin (1988) who contended that by owning franchised units the franchisor sheds ''risky'' locations to franchisees and retains the stable locations as company-owned. In addition, Thomas et al (1990) stated that compared to a wholly company-owned restaurant system, franchise systems are considered less risky because they can be viewed as a portfolio of operating units that can be adjusted in response to changing costs and revenue opportunities.…”

Section: Industry-specific Features Of the Global Lodging Industrymentioning

confidence: 99%

Toward a resolution of the cost of equity conundrum in the lodging industry: a conceptual framework

Madanoglu¹,

Olsen²

2005

International Journal of Hospitality Management

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The firm value estimate is derived from accounting and finance practices that focus on physical assets as opposed to intangible assets (Arthur Andersen Hospitality Leisure Executive Rep. 5 (1998) 2). The cost of equity estimation models used in firm valuation and capital investment decisions fall short of tapping important constructs to firm value, especially the intangible ones. The purpose of this study is to assess the present cost of equity capital determination models and provide a view of their relevancy for the lodging industry while simultaneously attempting to propose new options to meet the valuation and capital budgeting needs of the lodging industry. r

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“…The test for differences across the predictor groups in MANOVA is based on statistics that are convertible into equivalent multivariate F ratios (Cooley & Lohnes, 1971). The procedure safeguards against the inflation in the error rate that would occur if a series (2001), Dant and Kaufmann (2003), Dant et al (2008), Lafontaine (1992), Lafontaine and Shaw (1999), Shane (1998) C2 Total network size in the domestic market Alon (2001), Dant and Kaufmann (2003), Dant et al (2008), Lafontaine and Shaw (1999), Shane (1998) C3 Average total investment required in '000s of Euros Alon (2001), Brickley and Dark (1987), Dant and Kaufmann (2003), Dant et al (2008), Lafontaine (1992) C4 Average franchise fee in '000s of Euros Dant and Kaufmann (2003), Dant et al (2008), Lafontaine (1992), Shane (1998) C5 Average ongoing royalty fee rate in percent Alon (2001), Dant and Kaufmann (2003), Dant et al (2008), Shane (1998) C6 Cash liquidity requirement in '000s of Euros Dant et al (2008), Lafontaine (1992), Shane (1998) C7 Incidence of internationalization Dant et al (2008), Perrigot and Cliquet (2005) C8 Sectoral differences (1-products and retail vs 0-services) Caves and Murphy (1976), Dant et al (2008), Lafontaine and Shaw (1999), Shane (1998), Thomas et al (1990) Data from the German Franchise Association's annual franchise guide. I further control for multiunit ownership by the average number of outlets each franchisee owns per system, with insignificant results.…”

Section: Methodsmentioning

confidence: 99%

The Prevalence and Performance Impact of Synergies in the Plural Form

Meiseberg

2012

Manage Decis Econ

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Using the plural form helps franchised chains cope with the four ‘franchising imperatives’—system growth, chain uniformity, local responsiveness, and systemwide adaptation. Yet, despite the obvious importance of chain composition, empirical research on synergies in the plural form is largely absent, and insights on performance implications of the plural form are equally scarce. Consequently, with detailed data from 122 chains, this paper provides what is ostensibly the first in‐depth examination of the prevalence and performance effects of synergies that franchisors actually achieve by using the plural form. The study concludes with managerial implications for governance design in franchised chains. Copyright © 2012 John Wiley & Sons, Ltd.

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The Effects of Ownership and Investment upon the Performance of Franchise Systems

Cited by 28 publications

References 7 publications

A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France, and Brazil

A Cross-Cultural Comparison of the Plural Forms in Franchise Networks: United States, France, and Brazil

Toward a resolution of the cost of equity conundrum in the lodging industry: a conceptual framework

The Prevalence and Performance Impact of Synergies in the Plural Form

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