 Franchising and firm financial performance among U.S. restaurantsMelih Madanoglu, Kyuho Lee and Gary J. Castrogiovanni Journal of Retailing, 2011, vol. 87, issue 3, 406-417 Abstract: Franchising has attracted the attention of retailing and entrepreneurship scholars in the past three decades, but evidence pertaining to how franchising affects financial performance is mixed and inconclusive. Thus, the question remains as to whether franchising firms exhibit better financial performance than non-franchising firms in the same industry. In order to find an answer to this question, our study compares the risk-adjusted financial performance of franchising versus non-franchising restaurant firms over the 1995–2008 interval, using five different performance measures: the Sharpe Ratio, the Treynor Ratio, the Jensen Index, the Sortino Ratio, and the Upside Potential Ratio. For each measure, the results revealed that franchising restaurant firms outperformed their non-franchising counterparts. Thus, we provide very robust evidence that franchising is superior on average in the restaurant industry, which can help explain the increasing popularity of franchising as a business form. Keywords: Franchising; Financial performance; Risk-adjusted financial performance; Restaurants (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jouret:v:87:y:2011:i:3:p:406-417 DOI: 10.1016/j.jretai.2011.02.003 Access Statistics for this article Journal of Retailing is currently edited by A. Roggeveen More articles in Journal of Retailing from Elsevier |
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