Franchise failure: a reassessment of the Bates (1995) results
Franchising is often touted as a safe route to business ownership in the service arena. Yet findings by Bates (J Small Bus Manage 33(2):26–36, 1995 ) suggest that franchising may be a riskier alternative for prospective business owners than starting a non-franchised business. We contend that this conclusion is inappropriate because flaws in Bates’ study lend themselves to alternative interpretations of his results. The most critical flaws and plausible alternative interpretations are explained, and implications for prospective business owners are discussed. Copyright Springer-Verlag 2007
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Volume (Year): 1 (2007)
Issue (Month): 3 (September)
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References listed on IDEAS
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- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
- Timothy Bates, 1997.
"Survival Patterns Among Newcomers to Franchising,"
97-1, Center for Economic Studies, U.S. Census Bureau.
- Alfred R Nucci & Timothy Bates, 1990. "An Analysis of Small Business Size and Rate of Discontinuance," Working Papers 90-2, Center for Economic Studies, U.S. Census Bureau.
- Holmberg, Stevan R. & Morgan, Kathryn Boe, 2003. "Franchise turnover and failure: New research and perspectives," Journal of Business Venturing, Elsevier, vol. 18(3), pages 403-418, May.
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