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

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 sample, two predictors influence the plural forms phenomenon (i.e., total network size has a positive significant effect and incidence of internationalization has a significant negative impact).     

The Quality of Institutions and Organizational Form Decisions: Evidence from Within the Firm

In many retail and service sectors, firms have to establish a physical presence in a geographic market to access customers there. In countries where the quality of institutions is low, this can put assets at risk. We use data on the operations of a multinational, multibrand hotel company to show that in environments where local institutions are weaker—as proxied mainly by the World Bank's Checks index—the company eschews direct ownership. Rather than increasing its reliance on franchising, as predicted by some models, the company relies more on another form of organization commonly used in this industry, namely management contracts. We explain these patterns by emphasizing how the quality of the institutional environment affects the cost of using equity‐based organizational forms, per arguments in the current literature, but also the cost of enforcing the terms of franchise contracts.     

Possible Applications of Survival Analysis in Franchising Research

Time is an important variable for retailers. The concepts of survival and duration, linked to this time variable, can be very interesting in franchising research. For instance, what are the determinants of the survival of a network or a store? Which elements decrease the period before franchising or internationalising a network? There is a well adapted but little-exploited methodology in this research area: survival analysis. Consequently, this methodological paper presents in detail survival analysis methodology before giving relevant examples of applications in the franchising field. Managerial implications of these kinds of research are given before the conclusion.     

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

In this paper, we explore the impact of the organizational form (company‐owned versus franchised) and the type of customer (nonbusiness versus business) on online consumer‐generated satisfaction ratings in the hotel industry. Our empirical study deals with 6,348 TripAdvisor reviews regarding stays at one of 134 hotels of a plural form chain located in a Western European country. Our main finding reveals that the type of customer moderates the relationship between organizational form and customer satisfaction; business travelers having higher satisfaction with franchised hotels than company‐owned hotels in terms of satisfaction. We discuss the implications of these findings for the management of plural form chains.     

Analysing technical and allocative efficiency in the French grocery retailing industry

This paper focuses on the innovative two-stage procedure developed by Simar and Wilson to estimate the determinants of French retailing efficiency. During the first stage, the technical and allocative efficiency of French retailers will be assessed using the DEA (Data Envelopment Analysis) methodology to identify the best companies, in order to serve as peers for improving the performance of weaker companies. The companies analysed have therefore been ranked according to their total productivity over the period 2000–2004. During the second stage, the Simar and Wilson model will be used to bootstrap DEA scores via a truncated regression. The economic and managerial implications arising from this study will also be considered.     

Performance implications of centrality in franchisee advice networks

Although the literature has provided ample evidence for the decisiveness of the franchisor–franchisee relationship in explaining organizational success or failure, performance effects of franchisee–franchisee relationships remain largely unexplored. Yet a growing body of research indicates that by building interfranchisee relationships, franchisees can form advice networks in the chain. Such networks offer privileged access to resources such as knowledge, information, and best practices that help individual franchisees to become more productive. In this context, we study linkages between a franchisee's centrality in franchisee relationships and various individual performance outcomes, using comprehensive data from franchisees in 3 different chains in the largest European franchise market, France. We find that conditional on the specific governance structure of each chain, the results document a strong impact of centrality in advice networks on franchisee performance. Accordingly, we offer theoretical contributions concerning knowledge‐sharing processes in franchise chains, and managerial implications as regards more effective cooperation management in practice, from the perspective of both a franchisee and a franchisor.     

Opportunistic behaviors in franchise chains: the role of cohesion among franchisees

This paper explores social processes between franchisees as a way to control franchisee opportunism. Based on the literature of socio‐psychological and interorganizational relationships, we argue that cohesion among franchisees is negatively associated with opportunistic behaviors that are potentially harmful to the whole chain. We use multilevel and multisource data to show that perceptions of cohesion among franchisees relate both to a) how franchisees apply know‐how from franchisors (i.e., deviation from chains standards), and b) whether they transfer or withhold information that could be useful to the franchise system (i.e., information withholding). Our results underscore the importance of relationships among franchisees, an underexplored component of franchising. Copyright © 2010 John Wiley & Sons, Ltd.