Entrepreneurial global franchise ventures: US and European franchisee failure strategic and empirical perspectives

Rapid United States and European franchise growth offers potential benefits for stakeholders and host counties, as well as the potential for failure. Franchisee failure research is a complex area confounded by varying failure definitions, approaches, an event-focus, and single-year data. This paper includes a strategic franchisee failure perspective that views franchisee failure as a multi-stage process rather than an event; new longitudinal data from the United States for over 780 franchise systems and 292,000 franchise units and United Kingdom franchisee failure data for over 700 franchise systems and 31,000 franchisee units; and estimates of current European business-format franchise market size, including selected Central and Eastern European countries. Understanding and mitigating franchisee failure provide potential lessons for franchisors and franchisees. Franchisee failure and the strategic implications for franchise entrepreneurial ventures is a significant research area that merits further study and analysis.     

Opportunism,knowledge, and the performance of franchise chains

An important feature of most franchise chains is that they simultaneously use franchised and company‐owned outlets. In this study, I show that the relationship between the resources provided to outlet managers and the financial performance of franchise chains is contingent on their governance structure. Specifically, opportunism and knowledge considerations seem to prevent chains with a large proportion of franchised outlets from fully leveraging resources such as a valuable brand name and tacit business practices. On the other hand, brand name value and business practices tacitness are not directly related to the proportion of franchised outlets in chains. Copyright © 2008 John Wiley & Sons, Ltd.     

Case Study

ABSTRACT

This is a case study of one of the highest growth restaurant chains in overall system wide sales and unit growth in restaurant industry history as reported by The Nation's Restaurant News(2001). The inception of a small fledgling restaurant chain in Atlanta, Georgia to a multi-billion dollar company has changed the shape of restaurant industry growth and development. The practices of franchise growth and market penetration have allowed Applebee's International to record double digit profits over the last ten years. Future growth patterns, market saturation, and changing consumer preferences will be challenges that Applebee's will face in the future. This case study will outline Applebee's history and competitive strategies that have made the company successful. Further along in the case study an analysis of franchising in the restaurant industry and the franchising strategies Applebee's has produced over the years. This study will conclude by uncovering future issues that Applebee's may face and pose future questions to ponder about the company.     

A Functional Approach to International Channel Structure and the Role of Independent Wholesalers

The functional approach to the design of marketing channels has a long history in the marketing literature. In more recent years, the functional approach has been all but forgotten as the transactions cost approach has come into fashion. Yet, the functional approach offers severl significant advantages over transactions cost analysis, especially when the number of functions is condensed. Using a succint summary of the functions, produced through factor analysis, this paper examines the relationship between the functional performance capabilities of U.S. wholesalers used in the channel structure of foreign manufacturers. A statistically significant relationship was found, thus providing evidence of the role of functions in determining channel structure.     

特许经营的风险分析

特许经营作为一种全新的商业模式 ,在我国的大城市、沿海地区、经济特区迅猛发展。它的巨大优势已被其海外一百余年的发展历史所证明 ,但在其优势背后也潜藏着经营风险。本文从特许人和受许人两方面分析了其潜在的风险,并根据正常营业的加盟店的经营情况进行了风险测算 ,用内部收益率法和净现值法来计算其收益。     

特许经营:房地产中介业发展的新途径

通过分析房地产中介市场引入特许经营的必要性，结合房地产中介特许经营的现状及运作要点，认为通过推行特许经营能规范房地产中介市场行为，提高服务质量，促进房地产中介市场健康的发展。并提出了发展特许经营，需要完善的相关政策和管理问题。     

Does franchising help restaurant firm value?

A company's financial performance is of keen interest to many groups of people, including management, employees, shareholders, government, and so on. Although franchising has been one of the most common strategies to maximize a firm's financial performance in the restaurant industry, little research has been conducted regarding the relationship between the degree of franchising and the restaurant firm's financial performance. This study initially proposed a sigmoid relationship between the degree of franchising and the restaurant firm's financial performance based on the diversification theory. Findings, however, do not fully support the sigmoid relationship; rather a more quadratic or inverted U-shaped relationship was found.     

我国中餐业特许经营的问题与管理对策

特许经营是中餐业经营的新方法。这种方法极大地满足了顾客的需求 ,促进了我国中餐业的发展。可以预言 ,随着我国经济的发展 ,中餐业特许经营将成为我国 2 1世纪主要的经营方式 ,将对我国经济和社会做出巨大的贡献。目前我国中餐业特许经营出现了一些问题和困惑 ,阻碍了其快速发展 ,我们必须认真对待和解决。同时应重视整合我国中餐资源 ,加强宏观管理 ,使我国中餐业特许经营不断发展和壮大。     

Franchise,innovation and entrepreneurship

Since franchise business can be an alternative to independent business, it seems interesting to look at those factors that encourage individuals to choose franchise rather than independent business. It is also relevant to consider the role of innovation because it is generally accepted that independent business facilitates innovations to a greater degree than does franchise. The main goal of this paper is to determine the factors that encourage individuals to choose franchise activity and what role plays innovation in their decision.     

Does franchising pay? Evidence from the restaurant industry

Franchising has taken a prominent position in service industries for several decades, but little is known about how franchising affects financial performance. Thus, we addressed the question of whether chains that franchise to some extent outperform those that are wholly owned. Then, among chains that franchise, we also addressed the question of whether more franchising is better – that is, whether the proportion of a chain's units that are franchised is associated with superior financial performance. To answer these questions, our study first compares the risk-adjusted performance of franchising vs. non-franchising restaurant firms. Second, it investigates the relationship between franchising propensity and firm financial performance. We considered five different measures of firm financial performance: the Sharpe ratio, the Treynor ratio, the Jensen index, the Sortino ratio, and the upside potential ratio. On comparison of franchising and wholly owned firms, all five measures indicated that franchising firms outperformed their non-franchising counterparts. When we focussed on just the franchising firms, however, the results were less clear. Among firms that franchise, the franchising–performance relationship was positive and significant only with respect to the Jensen index. Thus, we provide very robust evidence that franchising pays – that is, that some franchising is good – but among firms that franchise, it is unclear whether more franchising is better.