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Organizational form and efficiency of franchise chains

Author

Listed:
  • Isabelle Piot-Lepetit

    (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Rozenn Perrigot

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Gérard Cliquet

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

Purpose - The purpose of this paper is to develop a new model allowing the implementation of a benchmarking process that jointly measure the efficiency of franchise chains and determine their optimal organizational form. Design/methodology/approach - The methodology is based on a non-econometric technique developed by management scientists on economic concepts for evaluating the performance of decision-making units and implementing a benchmarking process. An extended model is developed in the paper for evaluating the efficiency and determining the optimal percentage of company-owned outlets (PCO) of each franchise chain. Findings - First, results showed that the PCO has a positive impact on franchise chain efficiency; even if other chain characteristics have a larger impact. Second, the optimization of the PCO allows for additional improvements in efficiency. Research limitations/implications - Even though this study has some limitations (e.g. sample and variable selection), it contributes to the literature on franchising by providing an approach allowing us to answer to the question of Shane (1998) on the optimal proportion of franchised units given other firm characteristics. Practical implications - By developing a model that allows for the joint evaluation of franchise chain efficiency and optimal PCO, this study offers to franchisors a new benchmarking process allowing for both a competitive and functional benchmarking. Originality/value - The originality of this research can be found in the new model developed for allowing a benchmarking of franchise chains that allows an evaluation of efficiency jointly with a determination of their optimal organizational form.

Suggested Citation

  • Isabelle Piot-Lepetit & Rozenn Perrigot & Gérard Cliquet, 2014. "Organizational form and efficiency of franchise chains," Post-Print halshs-01023719, HAL.
    • Handle: RePEc:hal:journl:halshs-01023719
    DOI: 10.1108/IJRDM-04-2013-0089
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01023719
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    References listed on IDEAS

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    Cited by:

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    2. Shockley, Jeff & Turner, Tobin, 2016. "A relational performance model for developing innovation and long-term orientation in retail franchise organizations," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 175-188.
    3. Doo-Young Park & Kanghwa Choi & Dae-Han Kang, 2020. "Measuring the Meta Efficiency and Its Determinants on Efficiency in the Korean Coffee Shop Franchise," Sustainability, MDPI, vol. 12(6), pages 1-20, March.

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