Measuring the Meta Efficiency and Its Determinants on Efficiency in the Korean Coffee Shop Franchise

Doo-Young Park, Kanghwa Choi and Dae-Han Kang
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Doo-Young Park: Department of Business, Hansung University, Seoul 02876, Korea
Kanghwa Choi: Department of Business, Hansung University, Seoul 02876, Korea
Dae-Han Kang: Department of Business, Hansung University, Seoul 02876, Korea

Sustainability, 2020, vol. 12, issue 6, 1-20

Abstract: Previous applications of DEA (data envelopment analysis) models in the field of franchising have been scarce. In particular, measurement and analysis of the operational efficiency of coffee shop franchisors in the explosively growing coffee market in Korea is required. In this study, we categorize 29 Korean coffee shop franchisors into three groups according to their number of franchisees and employ the metafrontier analysis to measure the efficiency of coffee shop franchisors from 2015 to 2018. Based on the results of metafrontier DEA, this study identifies sources of inefficiency within individual coffee shop franchisors to provide insights for coffee franchise operators and investigates efficiency differences between small-chain and medium-chain coffee shop franchisors. Furthermore, the results of bootstrapped truncated regression provide that the external environmental factors affecting the efficiency of each individual group are totally different patterns depending on the franchise group. Based on the analysis results, this study suggests strategic initiatives tailored to individual coffee shop groups to enhance their operating efficiency and identifies the principal operational drivers of the environmental variables to achieve sustainable growth.

Keywords: coffee shop franchise; metafrontier; group frontier; technology gap ratio; bootstrapped truncated regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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