A Comparison of Retail Franchises, Independent Business, and Purchased Existing Independent Business Startups: Lessons From the Kauffman Firm Survey

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Dianne H.B. Welsh, Distinguished Professor of Entrepreneurship (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: Franchising is a major economic powerhouse. Though research has been conducted on franchising from multi-disciplinary viewpoints, no study has compared retail franchises, independent businesses, and purchased existing independent businesses in the startup phase. This study utilized data from the U.S.-based Kauffman Foundation Firm Survey and examined major variables that would more likely influence survival-business type, ownership, owner-operator combinations, total revenue, labor intensity, profit and loss, and prior ownership experience. Our findings indicate that franchises differ considerably from new, independent businesses in most respects but are similar to purchased existing independent businesses. The overall results confirm prior findings that franchises have impediments that may affect their survival in the first year of operation and that some of the advantages of choosing a franchise over another form of business that have been sighted by the industry may not be completely valid.

Additional Information

Publication
Language: English
Date: 2011
Keywords
business startups, entrepreneurship, firm survival, franchising