Plural Form and Franchise Chains Efficency: A Dea Meta-Frontier Approach applied to French Chains

Rozenn Perrigot, Isabelle Piot-Lepetit and Gérard Cliquet
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Isabelle Piot-Lepetit: INRA UMR 1110 MOÏSA, France
Gérard Cliquet: Graduate School of Management (IGR-IAE), University of Rennes 1 - CREM-CNRS UMR 6211, France

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: This paper deals with the performance of franchise chains related to their percentage of company-owned outlets (PCO). This research uses a Data Envelopment Analysis (DEA) to assess franchise chains’ efficiency, and a meta-frontier approach to analyze chains’ efficiency between and across sectors. The sample includes 43 chains of the service and retail sectors, located in the French market. Data are available over the 2005-2007 period allowing a longitudinal analysis. The main findings show that the meta-frontier is built up on retail chains rather than on service chains, and that there is a relationship between the PCO and the chain efficiency. Finally, there is no significant difference between the observed PCOs and the optimal PCOs which means that franchisors in our sample have already reached a PCO that is close to the PCO that optimizes the chain efficiency.Creation-Date: 2012-02

Keywords: Franchising; Plural Form; Percentage of company-owned outlets (PCO); Efficiency; Data Envelopment Analysis; Meta Frontier (search for similar items in EconPapers)
Date: 2012-02
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