Factors Impacting Capital Expenditures in the Quick Service Restaurant Industry

The purpose of this article is to study the factors that impact capital expenditures in the quickservice restaurant industry. The authors hypothesize that growth opportunities, free cash flow, size, corporate earnings, economic conditions, and franchising status will have impact on the capital expenditures of quick-service restaurants. This study analyzed capital expenditure and other financial data on quick service restaurants for the period 2006–2016. Results suggest that corporate earnings, size, cash flow, economic conditions, and franchising have a significant relationship with capital expenditures, while growth opportunities are not associated with capital expenditures. Specifically, a high degree of corporate earnings, large size, and a high degree of cash flow tend to be associated with a high degree of capital expenditures; while favorable economic conditions and franchising tend to be associated with a low level of capital expenditures

Franchising as a Strategy for Combining Small and Large Group Advantages (Logics) in Social Entrepreneurship:A Hayekian Perspective

This article develops a Hayekian perspective on social franchising that distinguishes between the end-connected logic of the small group and the rule-connected logic of the big group. Our key claim is that mission-driven social entrepreneurs often draw on the small-group logic when starting their social ventures and then face difficulties when the process of scaling shifts their operations toward a big-group logic. In this situation, social franchising offers a strategy to replicate the small group despite systemwide scaling, to mobilize decentrally accessible social capital, and to reduce agency costs through mechanisms of self-selection and self-monitoring. By employing a Hayekian perspective, we are thus able to offer an explanation as to why social franchising is a suitable scaling strategy for some social entrepreneurship organizations and not for others. We illustrate our work using the Ashoka Fellow Wellcome

Proposing new variables for the identification of strategic groups in franchising

The identification of strategic groups in the Spanish franchising area is the main aim of this study. The authors have added some new strategic variables (not used before) to the study and have classified franchisors between sectors and distribution strategy. The results reveal the existence of four perfectly differentiated strategic groups (types of franchisors). One of the major implications of this study is that the variables that build a strategic group vary depending on the respective sector the network operates in and its distribution strategy. This fact indicates that including sector and distribution strategy is absolutely necessary to achieve good classifications of franchisor type

Does franchising create value? An analysis of the financial performance of US public restaurant firms

Author's OriginalIt is commonly believed that the franchising method of distribution provides strategic and operational benefits to the companies that adopt it. These benefits should result in superior financial performance as compared to that of firms that do not use franchising. Yet, the empirical evidence of the effects of franchising on financial performance is sparse and mixed. The purpose of this paper is to further examine the empirical evidence of the impact of franchising on a firm’s financial performance by using performance metrics (Economic Value Added and Market Value Added) that are extensively used in corporate finance. This study focuses on the US public restaurant sector. The results provide some evidence that franchising firms create more market and economic value than do non-franchising firms. A revised version of this paper has since been published in the International Journal of Hospitality and Tourism Administration. Please use this version in your citations.Aliouche, E. & Schlentrich, U. (2009). Does Franchising Create Value? An Analysis of the Financial Performance of US Public Restaurant Firms. International Journal of Hospitality & Tourism Administration, 10(2), 93-10