Franchise failure: a reassessment of the Bates (1995) results |
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Authors: | Gary J. Castrogiovanni Robert T. Justis |
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Affiliation: | (1) Craig School of Business, M/S PB 7, California State University, Fresno, CA 93740-8001, USA;(2) College of Business Administration, Louisiana State University, Baton Rouge, LA 70803-6328, USA |
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Abstract: | Franchising is often touted as a safe route to business ownership in the service arena. Yet findings by Bates (J Small Bus Manage 33(2):26–36, 1995) suggest that franchising may be a riskier alternative for prospective business owners than starting a non-franchised business. We contend that this conclusion is inappropriate because flaws in Bates’ study lend themselves to alternative interpretations of his results. The most critical flaws and plausible alternative interpretations are explained, and implications for prospective business owners are discussed. |
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Keywords: | Franchising Small business Failure Survival Risk |
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