Franchise ownership types and noneconomic performance among quick service restaurants: do family operated franchises receive fewer health code violations?

Erik Markin (), Chelsea Sherlock (), R. Gabrielle Swab () and Benjamin D. McLarty ()
Additional contact information
Erik Markin: Mississippi State University
Chelsea Sherlock: Mississippi State University
R. Gabrielle Swab: Parker College of Business, Georgia Southern University
Benjamin D. McLarty: Rowan University

Small Business Economics, 2024, vol. 63, issue 2, No 15, 869 pages

Abstract: Abstract Using an agency theory perspective combined with arguments related to the importance of socioemotional wealth (SEW), we evaluate the distinctions among family-, lone-founder-, and corporate-owned and operated restaurants regarding their impact on relevant noneconomic goals in the franchising context (i.e., health code violations). Because of agency issues and family-centric long-term motivations (e.g., desires to enrich members of the family and maintain family ownership across generations), we predict family franchises will place a greater emphasis on noneconomic outcomes and should outperform both lone-founder and corporate restaurants (i.e., receive less health-code violations). Relatedly, we also predict lone-founder franchises will receive fewer violations than corporate outlets due to their enhanced identification with the franchise. We test our hypotheses with a sample of three large fast-food chains in the Southeastern United States. Surprisingly, our results indicate that family-owned restaurants perform worse on noneconomic outcomes than both lone-founder- and corporate-owned restaurants. We discuss the implications of these findings to offer contributions to family business research and franchise practitioners alike.

Keywords: Agency theory; Family firms; Family involvement; Franchising; Noneconomic goals (search for similar items in EconPapers)
JEL-codes: L21 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11187-024-00882-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:63:y:2024:i:2:d:10.1007_s11187-024-00882-7

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-024-00882-7

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().