Plural forms versus franchise and company-owned systems:ADEAapproach of hotel chain performance

Laurent Botti, Walter Briec and Gérard Cliquet
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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

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Abstract: Plural form tends to be the most popular organization form in retail and service networks compared to purely franchisedor purely company-owned systems. In the first part, this paper exposes the evolution of researchers' state of mind from theway of thinking which considers franchising and ownership as substitutable organizational forms to theories which analyzethe utilization of both franchise and company arrangements. The paper describes the main attempts to explain theoretically thesuperiority of plural forms. In the second part, the paper discusses the hypothesis which says that there is a relationship betweenthe organizational form of the chain and its efficiency score. It is demonstrated through the application of a data envelopmentanalysis method on French hotel chains that plural form networks are in average more efficient than strictly franchised andwholly owned chains. The Kruskal–Wallis test which is a distribution-free rank-order statistic is used to statistically verify thisrelationship. The result does not permit the rejection of the null hypothesis regarding whether an organizational form is moreefficient than another one. Hence, this paper opens prospects for researches aiming at testing the organizational form effect ondifferent samples and with other methods.

Keywords: Franchise; Company-owned system; Plural form; DEA; Efficiency; Kruskal–Wallis (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (29)

Published in Omega, 2009, 37, pp.566 - 578

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00348088

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