Organizational choices and financial performance: the case of company-owned stores, franchisee-owned stores and stores-within-a-store among French fashion retailers
This paper deals with the governance and financial performance issues in the context of French Fashion retail companies. In this study, we analyze the influence of the organizational choices on the financial performance at the network level. We consider three forms used in isolation (company-owned stores, franchisee-owned stores and stores-within-a-store), three dually-organized forms (dual forms mixing two of the three forms) as well as a combined form associating the three ones. We study a sample of mostly privately-held French retail companies from the fashion sector (n= 170), using two criteria of performance - profit margin ratio and return on assets. The results show that none of the purely or dual forms tends to generate better financial performance than any other, even though descriptive statistics exhibit important differences in terms of performance among organizational forms. The results highlight that networks combining company-ownership, franchising and stores-within-a-store generate better financial performance, up to a certain point.
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