Format selection and the treatment effects on chain businesses outlet performance: A self-selection approach

Abstract

The selection of business format (franchised or company-owned) for each outlet of a chain business is obvious not random. Nevertheless, the factors affecting the selection and its performance impacts are rarely addressed in prior studies. The present study collected 212 chain outlets data and analyzed with econometric models regarding the self-selection issue. The results show that the selection of outlet format by chain is nonrandom and the company-owned format in general accrues greater customer counts than the franchised outlets.