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Antecedents and consequences of external risk perception in franchising: evidence from the hospitality industry

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  • Vicente Safón
  • Alejandro Escribá-Esteve

Abstract

In this article, we contribute to the understanding of the role that external risk perceptions play in decisions regarding the combination of company-owned and franchised units in the hospitality industry, and to knowledge of the impact of specific CEO characteristics on perceptions of environmental uncertainty. We examine the effects of tenure, an entrepreneurial nature and the innovative attitude of the CEO on the perception of external risk, and address the direct and indirect consequences of such perceptions of external risk on the configuration of the network of outlets. Our results show a significant relationship between the characteristics of the CEO and the perception of risk but, contrary to expectations, risk perception is associated with a lower degree of franchised outlets within the ownership mix. Copyright Springer-Verlag 2011

Suggested Citation

  • Vicente Safón & Alejandro Escribá-Esteve, 2011. "Antecedents and consequences of external risk perception in franchising: evidence from the hospitality industry," Service Business, Springer;Pan-Pacific Business Association, vol. 5(3), pages 237-257, September.
    • Handle: RePEc:spr:svcbiz:v:5:y:2011:i:3:p:237-257
    DOI: 10.1007/s11628-011-0112-z
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    1. Richard S. Brown, 2017. "Franchisor market power and control rights in franchise systems: the case of Major League Baseball versus the Los Angeles Dodgers," Service Business, Springer;Pan-Pacific Business Association, vol. 11(1), pages 1-21, March.

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