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Franchised Network Efficiency: A DEA Application to US Networks

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Economics and Management of Networks

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

The concept of performance has been little explored in the franchising literature. In this paper, we explore the franchising network performance, and more specifically the franchising network efficiency, from the franchisor point of view and through a DEA approach (Data Envelopment Analysis) Two main indicators of the franchisor revenues are used: the on-going franchising royalties and the franchising fee. The purpose of this paper is built into an efficiency perspective. Data concern the first 150 franchising networks of the Entrepreneur’s 25 Annual Franchise 500® ranking (2004). The findings indicate that most of the networks are under-efficient and one of the main reasons for this stems from scale efficiency. A particular network is also studied in depth. Moreover, four hypotheses are empirically tested. Implications of the study are finally discussed.

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Author information

Authors and Affiliations

  1. Instituto Superior de Economia e Gestao, Technical University of Lisbon, Rua Miguel Lupi, 1249 - 078, Lisbon, Portugal

    Carlos Pestana Barros

  2. CREM UMR CNRS 6211, ESC Rennes School of Business, 2, rue Robert d’Arbrissel, CS 76522, 35065, Rennes Cedex, France

    Rozenn Perrigot

Authors
  1. Carlos Pestana Barros
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  2. Rozenn Perrigot
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Editor information

Editors and Affiliations

  1. IGR-IAE, University of Rennes 1, 11 rue J. Macé CS 70803, 35708, Rennes, Cedex 7, France

    Gérard Cliquet

  2. Faculty of Business and Information Technology, Department of Business and Management, University of Kuopio, Mikrokatu 1F, 70211, Kuopio, Finland

    Mika Tuunanen

  3. RSM Erasmus University, Burg.Oudlaan 50, Room T8-56, 3062 PA, Rotterdam, The Netherlands

    George Hendrikse (Chair Economics of Organization) (Chair Economics of Organization)

  4. Center of Business Studies, University of Vienna, Brünner Str. 72, 1210, Vienna, Austria

    Josef Windsperger

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Barros, C.P., Perrigot, R. (2007). Franchised Network Efficiency: A DEA Application to US Networks. In: Cliquet, G., Tuunanen, M., Hendrikse, G., Windsperger, J. (eds) Economics and Management of Networks. Contributions to Management Science. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-1758-4_10

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