Journal article
Overestimation and Venture Survival: An Empirical Analysis of Development Commitments in International Master Franchising Ventures
Journal of economics & management strategy, Vol.14(4), pp.933-953
12/2005
DOI: 10.1111/j.1530-9134.2005.00088.x
Abstract
Many international master franchising contracts include “development commitments,” clauses specifying a number of units that master franchisees must develop in exchange for exclusive rights to an assigned market, typically their entire home nation. I analyze 142 contracts with development commitments signed by US fast food franchisors and their master franchisees. Several empirical regularities emerge from the analysis: First, the development commitments are large and rarely completely fulfilled. Second, a robust negative relationship exists between survival and development commitment size. Further, ventures with larger commitments exhibit a lower level of investment still productive at the end of the development period. Various explanations for these regularities are considered.
Details
- Title: Subtitle
- Overestimation and Venture Survival: An Empirical Analysis of Development Commitments in International Master Franchising Ventures
- Creators
- Arturs Kalnins - School of Hotel Administration 545D Statler Hall Cornell University Ithaca, NY 14853 atk23@cornell.edu
- Resource Type
- Journal article
- Publication Details
- Journal of economics & management strategy, Vol.14(4), pp.933-953
- Publisher
- Blackwell Publishing, Inc
- DOI
- 10.1111/j.1530-9134.2005.00088.x
- ISSN
- 1058-6407
- eISSN
- 1530-9134
- Number of pages
- 21
- Language
- English
- Date published
- 12/2005
- Academic Unit
- Management and Entrepreneurship
- Record Identifier
- 9984083866002771
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