Search results

This study aims to validate the value-added hypothesis in hotel franchising using data from 2,120 properties across the United States with a total of 12,720 observations over a six-year period of 2008-2013.

A series of annual cross-sectional regressions for each of the sample years and aggregated panel regressions for all sample hotel years were conducted. Newey–West errors were computed to address potential issues of autocorrelation and heteroscedasticity, and sensitivity tests were also performed.

The paper concludes that franchise royalty fee adds value to hotel franchisees as it significantly and positively affects revenue per available room (RevPAR) for all sample years after controlling for the major determining dimensions of RevPAR. A series of sensitivity tests also show robustness of results.

This study offers a rational and empirical explanation for the positive and significant effect of franchise royalty fees on hotel performance and the value-added hypothesis. Hoteliers need to ensure that there is a proper match between hotel specific attributes and the potential franchise when making a franchise selection. Individual entrepreneurs can partner with franchisors to reap the benefits of franchising, while experienced hoteliers can also use the findings of this study to make strategic decisions.

This study is the first using actual performance data from a large hotel property sample over multiple years to validate the value-added theory, where a higher royalty fee does command a higher RevPAR.

Research on franchise system survival has focused on analyzing organizational failure. However, there are two types of market exit: organizational failure and franchise discontinuance, but little research has distinguished between the two. The purpose of this study is to examine whether different factors explain these types of exit. Apart from the common factors included in previous research (age, size, upfront fee, royalty rate and ownership structure), this paper aims to add system growth and its interaction with age and size.

The paper uses data about franchise systems in Spain from 1986 to 2004 from the catering and fashion sectors and applies the Cox survival model to test the hypotheses.

The paper finds that system growth rates and system size only influence franchise discontinuance. Both the youngest and the oldest firms show the lowest risk of discontinuing franchising. The results are similar to those found in previous research that uses the two types of market exit as synonymous.

The article findings suggest that it is important to define franchise survival.

This research identifies what franchisors can do to continue in the market. An important result is that young and small franchisors should grow at a moderate rate. They should learn first how to manage a few units before becoming a large network.

This research examines the differences between two types of market exit (organizational failure and franchise discontinuance) and their drivers from the franchisor's perspective. This research contributes to the franchising literature by analyzing the effect of growth on survival. Additionally, the moderating effect of size and age on growth on the two types of market exits is included.

The purpose of this paper is to demonstrate how signaling support services and contractual arrangements that create value for incumbent franchisees can help to create value for the whole network by attracting prospective franchisees.

Using data from Bond's Franchising Report the study analyses franchisors operating between 1994 and 2008 via a Generalized Method of Moments (GMM) model for an unbalanced panel of 2,474 franchisors.

Training, financial assistance, sub-franchising and restrictions against passive ownership, and the use of area development agreements are found to be valuable for prospective franchisees. Experience and the number of company-owned and franchised units also attract prospective franchisees.

Our findings imply that not all value-creating services and contractual arrangements are interpreted in the same way by prospective franchisees. Franchisors should offer training and financial assistance to new franchisees in the early stages of a franchise. They should also allow sub-franchising but restrict passive ownership and offer the possibility for area development agreements as contractual arrangements to appeal to new franchisees. Franchisors should focus not only on expansion, but should view the chain in a holistic manner by sustaining and growing both franchised and company-owned units.

The findings contribute to the franchising literature by providing new evidence on how offering and signaling some contractual arrangements and support services can help franchisors create value for incumbent franchisees and can attract new franchisees. Our research shows that value in franchising is created differently depending on whether the franchisees are incumbent or prospective.

This study aims to examine how operator type moderates the relationship between hotel information technology (IT) expenditures and operating performance.

By adapting and extending O’Neill et al.’s (2008) and Hua et al.’s (2015) research, this study constructed an empirical model and tested proposed hypotheses, with Newey and West (1994) errors computed to accommodate potential heteroscedasticity and autocorrelation issues.

Operator type moderates the impact of hotel IT expenditures on operating performance. In particular, it appears that the operator type of franchising exerts a stronger moderating effect compared with other operator types explored.

This study, as the first of its kind, shows that the choice of operator type shapes how a hotel can effectively use IT expenditures to improve operating performance. This finding can be beneficial for hotel owners when making operator type decisions. In addition, operator type moderates the direct impact of IT expenditures on revenues and gross operating income. This study’s results show that franchised hotels seem to use IT expenditures more effectively compared with independently owned hotels.

This study contributes both theoretically and practically to understand how operator type moderates the relationship between IT expenditures and hotel performance. The research outcome provides a more holistic view that governs the relationships between IT expenditures, operator type and operating performance.

This paper aims to offer empirical insights on how investing in e-commerce capabilities affects the relationship between loyalty programs and hotel operating performance so as to aid in identifying proper resource allocation strategies.

This study extended the model in Hua et al. (2015) by testing the interaction of e-commerce and loyalty programs.

The findings illustrate that proper allocation of company financial resources to e-commerce initiatives can help improve the impact of loyalty programs on hotel operating performance.

The results of this study illustrate that hotel performance can be improved by the synergy between loyalty program and e-commerce initiatives. Thus, hotel managers and owners can use results from this study to improve the efficiency of their asset allocation strategies, with five practical implications offered.

Theoretically, this study adapted and extended an integrative model of hotel operating performance (Hua et al., 2015) by identifying critical factors that elucidate the variance in firm performance. In addition, the moderating role of e-commerce provides a new conceptualization of information technology. Practically, this study makes several important contributions as well.

The divergent interests of franchisor and franchisee give rise to significant ex-post conflict following the purchase of a franchise. Australian regulators have sought to assist transparency in franchising decision making by legislating for disclosure documents that expose key variables that theoretically determine choice on the part of prospective franchisees. The purpose of this paper is to explore the value proposition of the disclosure document and tests its normative effectiveness using a signal-theoretic perspective.

Potential investors were asked to consider selected attributes through a choice-based survey, consistent with consumer theory, and focussing on an attribute-based determination of value. However, complex decision making in general and choice modeling can place severe cognitive burdens on respondents and induce satisficing rather than maximizing behavioral patterns. Best-worst scaling (BWS) provided a means for potential purchasers to respond coherently.

Findings indicate limited capacity for potential investors to rationalize the simplistic choices presented, suggesting that franchise choice is determined to a large degree by non-rational factors.

This research is embryonic (exploratory) in nature with the findings providing an imperative for further investigation into workable attributes of franchise systems. Analysis is limited to prospective franchisees’ perceptions and needs to be triangulated with franchisor and policy-makers perspectives.

Both franchisors and policy makers can utilize this research to improve transparency in the disclosure document. Prospective franchisees should then be able to make more effective decisions about the franchise systems of choice.

A reduction in conflict within the franchising sector (no matter how trivial) will improve the business operations, franchisee and employee welfare throughout the sector. Progress on this topic will improve the sustainability and overall attractiveness of the sector.

Conjoint analysis has not been used previously in franchising research. The use of BWS on prospective franchisee perceptions is innovative providing a basis for much research to be done in this field of research.

The purpose of this paper is to assess the conceptual relationship between the running royalty programs and the performance of a franchisee or franchisor. Thus, this paper will analyze the correlation of financial stability when the franchisor strengthens the running royalty policy at aspect of franchisor.

A model is presented and designed. The paper will analyze the causality which is affected by strengthening the profit structure with the running royalty program and also find out how the strengthened profit structure will affect and improve the franchisors' sustainable supports for the franchisees, service quality and service satisfactions.

Although the franchise industry is growing in Korea, the stability of business is still in doubt because the business cycle of the franchisor is shortened. This paper found the reasons why franchisors have unstable status in Korea. The main reason was the instability of profit structures for franchisors which are a burden to the franchisees which then worsen the franchisors' financial status. The biggest different from the US franchise industry was the running royalty program. So, this paper will apply the running royalty program politically to the franchise business in Korea and find out how it will affect the overall business cycle.

This study was limited to the Korean franchise industry and found out the factors which influence the franchisors' performance in various aspects. By analyzing with casual loop diagram, this paper found how each of the factors interact and bring out the positive feedback process. Also, it suggests a way of adopting the running royalty program into the Korean market.

This study aims to help resolve some of the inconsistencies of the relationships between franchisor growth and its drivers in prior literature.

First, this study provides a meta-analysis with bivariate correlation analysis and moderation analysis. It then offers an additional analysis of secondary data to shed further light on the relationship between franchisor growth and its drivers.

This study confirms the diverse nature of the relationship between the various measures of growth and drivers. It finds that proportion of outlets franchised and brand reputation have the strongest relationships with geographic dispersion; age and proportion of outlets franchised have the strongest relationships with outlet growth rate; and size has the strongest relationship with the number of new outlets. In addition, these multiple relationships are moderated by all three research characteristics that this study investigates, including data source, time frame and industry context.

This meta-analysis merely offers an examination of the most commonly studied drivers and not a complete review of all potentially important variables. It calls for further research that examines the factors that lead to franchisor growth and performance in general.

Managers of young franchisors do not need to rush to expand their business across a wide range of geographic regions. Young franchisors instead should focus initially on gaining maturity, developing their business concept, building an attractive track record and improving their brand reputation. Beyond a strong brand and well-developed business concept, franchisors can attract potential franchisees by reassuring them and making them feel secure about their investment.

This study includes a bivariate analysis that was used to conduct a meta-analysis and also an empirical analysis of secondary data. By conducting the secondary data analysis, we were able to examine the extent to which the meta-analysis results of this study could be extended beyond the time period for papers included in the meta-analysis.

This study provides a robust test of a central question in franchising: which factors influence the timing of adopting the first franchised outlet? Using a novel methodology, the purpose of this study is to examine the factors that accelerated or delayed the opening of the first franchisee outlet for the largest franchise chains in the USA.

The sample addresses a methodological shortcoming in traditional franchising literature. Using duration analysis, the paper captures the timing of the first franchise outlet for a retail concept. This allows us to capture the antecedents that explain the differences in timing between franchise systems.

By setting initial investment costs lower, the average time to attract the first franchisee is shorter. However, as franchisee net worth requirements rise, the time to attract the first franchisee is longer. Finally, franchisors tend to defer expansion via franchising in favor of managing their own outlets in resource rich industries.

The dataset is limited to the largest US franchise systems.

This study suggests factors that would cause franchisors to decelerate or accelerate the initial franchise timing decision. Businesses time expansion based on industry size, outlet start‐up costs, and franchisee net worth.

This study provides the first examination of the firm and industry drivers affecting when a firm initiates franchising. This study uses rigorous empirical testing of franchising theoretical predictions using duration analysis.

The purpose of this paper is to understand the presence of royalties in a number of retail contracts, recognising that some distribution networks do not use this monetary provision.

The paper is based on the theory of contracts. It provides an econometric analysis of recent French data using the main theoretical explanation concerning the presence of royalties in distribution contractual relationships.

The evidence suggests that the presence of royalties in distribution contracts depends on the management by the producer of the brand value: the transmission of concepts and know‐how to retailers and advertising and promotional campaigns.

As a result of data availability, the paper focuses on the presence or the absence of royalties in distribution contracts. Future research should aim to explain the level of royalty rate, i.e. the share of the retailers' turnover accruing to the producers.

This paper offers an understanding of the presence of royalties in the contractual relationships between producers and retailers, providing practitioners with a better basis for making decisions in designing distribution contracts.

This paper enlarges the empirical evidence concerning the monetary provisions for several kinds of distribution networks based on a brand name and considers different types of producer involvement in the network.