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Open AccessArticle

Economic Sustainability in Franchising: A Model to Predict Franchisor Success or Failure

1
Department of Economics and Business Administration, University of Burgos, C/Parralillos, s/n, 09001 Burgos, Spain
2
Department of Economics and Business Administration, University of Valladolid, Avda. Del Valle Esgueva, 6, 47011 Valladolid, Spain
*
Author to whom correspondence should be addressed.
Sustainability 2017, 9(8), 1419; https://doi.org/10.3390/su9081419
Received: 9 July 2017 / Revised: 3 August 2017 / Accepted: 7 August 2017 / Published: 11 August 2017
(This article belongs to the Special Issue Entrepreneurial Sustainability: New Innovative Knowledge)
As a business model, franchising makes a major contribution to gross domestic product (GDP). A model that predicts franchisor success or failure is therefore necessary to ensure economic sustainability. In this study, such a model was developed by applying Lasso regression to a sample of franchises operating between 2002 and 2013. For franchises with the highest likelihood of survival, the franchise fees and the ratio of company-owned to franchised outlets were suited to the age of the franchise. Surviving franchises were those that opened franchised outlets at a sustainable pace, increased the franchise fee as intangible assets increased, and effectively managed profitability and efficiency. View Full-Text
Keywords: franchise; survival; economic sustainability; Lasso regression model; Spain franchise; survival; economic sustainability; Lasso regression model; Spain
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MDPI and ACS Style

Calderon-Monge, E.; Pastor-Sanz, I.; Huerta-Zavala, P. Economic Sustainability in Franchising: A Model to Predict Franchisor Success or Failure. Sustainability 2017, 9, 1419.

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