Management, Entrepreneurship and Hospitality (Melih Madanoglu)
What Determines the Performance of Franchising Restaurant Chains?
First-Year Scholars: Samuel Dunphy, Lisbeth Gallardo, Kana Lewis, Morgan Lucas, Dev Patel, Jayden Perdue,
Avery Seiz, & Valerie Thomas
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Franchising is a very popular organizational form in service-based industries such as the restaurant industry. The industry is proudly represented by giants such as McDonald's, Subway, Olive Garden, Chili's and many companies that franchise most or all of their stores. Franchising is considered to be a performance-enhancing strategy relative to owning all stores. While some studies report that more franchising is better for firm performance, some others argue that there is an optimal level where franchising leads to higher firm financial performance. There are other studies that focus on factors that influence company-level survival of franchising firms. The present study uses an alternative firm performance measure, and aims to go beyond previous arguments, by focusing on the survival of individual franchised stores within a chain.
The project aims to use corporate-level data to assess which factors lead to chain-level
continuity (survival) rates. Part of the data for this study has been provided by
FRANDATA. The data includes the 5-year period between 2016-2019. Some variables to consider as determinants of survival would be the amount of franchise fees, franchisor company experience, system size, profitability, percentage of franchised stores etc.
To achieve the purpose of the project, first-year scholars will conduct a review of past literature. This task will help determine which relationships or hypotheses will be proposed in the current study. Then, data needs will be determined to test hypothesized relationship between chain-level factors and the survival rates of franchised stores. First-year scholars will assist in collecting and coding data for approximately 70 restaurant companies. Next the coded data will be analyzed quantitively. That is, statistical analyses will be help answer research questions about what determines and results will be written up. The findings of the project will be presented at local and/or national undergraduate research conferences.
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- First-year scholars will develop some knowledge of the restaurant industry and the
restaurant chains/companies.
- First-year scholars will learn how to collect secondary firm-level (company) data
from company documents and input them into Microsoft Excel to build a dataset.
- First-year scholars will learn how to write an abstract for a research study.
- First-year scholars will become familiar with franchising literature by searching
for and reading scientific articles.
- First-year scholars will learn how to prepare tables by including results from the
statistical outputs.
- First-year scholars will learn how to report these results in a research paper/presentation.
- First-year scholars can present their work at Spring 2025 Symposium of Student Scholars and NCUR 2025 in Pittsburgh, PA.
- If interested, the scholars can write a research paper that may be published in undergraduate research.
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In the first two months, there will be bi-weekly or online meetings with the student where tasks and the overall progress of the project will be discussed. Later, the first-year scholars can share their progress via bi-weekly checkpoints that can be communicated via e-mail or through Teams. The scholars’ weekly tasks may vary depending on the stage of the project. The breakdown of specific duties will be communicated once the scholars are selected.
While the tasks can vary from week to week, the overall duties can be summarized as
follows:
- Review company data in spreadsheet such as Microsoft Excel and help with coding and calculating new variables.
- Conduct basic literature review to write the introduction section of the project.
- Scholars may also be trained how to conduct basic statistical analysis in Excel.
- Scholars will help with preparing tables and figures that will be used in presenting
the research paper at academic conferences and/or submitted to academic journals.
- The first-year scholars will learn how to use a reference manager software such as
Zotero where they will build a bibliography of relevant studies. In addition, scholars
will learn how to insert the citations into a research paper.
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Modality (Face-to-Face, Hybrid, Online)
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