In this paper, we examine ownership structures of
franchise chains and evaluate their impact on franchisor
profit. Specifically we compare pure forms of
franchising with those that use both companyowned and
franchised outlets within one chain – a phenomenon
termed the plural form. Theoretically such plural
arrangements are supposed to provide franchisors with
lower costs, higher growth, greater total-quality, and
reduced business risk. Empirical results of this study
indicate the superiority of companyowned businesses over
franchised units in generating franchisor profits.
Moreover plurally organized systems compensate for
losses from franchising with profits from company units
and outperform purely franchised competitors in overall
profitability. pdf 2004
