Dataset Information

Franchising structure changes and shareholder value: Evidence from store buybacks and refranchising.

ABSTRACT: Drawing on agency theory and transaction cost analysis, this study investigates the impact of refranchising and buybacks of downstream retail units by franchising firms on shareholder value (i.e., stock returns). It further evaluates the contingency role of firm and industry factors in shaping this impact. An event study analysis over the years 2001-2020 confirms that both refranchising and buybacks positively affect stock returns. However, notable impact differences emerge between the two types of strategic decisions. For refranchising, firms with lower royalty rates, smaller returns-on-assets (ROA), and higher trade credit provided generate higher stock returns. Whereas, for buybacks, firms with higher royalty rates derive more value in stock markets. Analysis further shows that investors judge refranchising (buybacks) less (more) favorably in munificent industries, but industry dynamism has no effect on the stock returns generated from these moves. Together, the study offers important implications for franchising theory and retail practice in marketing.

Supplementary information

The online version contains supplementary material available at 10.1007/s11747-022-00921-3.

SUBMITTER: Sadovnikova A

PROVIDER: S-EPMC10435657 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

Franchising structure changes and shareholder value: Evidence from store buybacks and refranchising.

Sadovnikova Anna A Kacker Manish M Mishra Saurabh S

Journal of the Academy of Marketing Science 20230114 5

Drawing on agency theory and transaction cost analysis, this study investigates the impact of refranchising and buybacks of downstream retail units by franchising firms on shareholder value (i.e., stock returns). It further evaluates the contingency role of firm and industry factors in shaping this impact. An event study analysis over the years 2001-2020 confirms that both refranchising and buybacks positively affect stock returns. However, notable impact differences emerge between the two types ...[more]

PMID: 37600157

Similar Datasets

Project description:BackgroundA prominent strategy to engage private sector health providers in low- and middle-income countries is clinical social franchising, an organisational model that applies the principles of commercial franchising for socially beneficial goals. The Matrika programme, a multi-faceted social franchise model to improve maternal health, was implemented in three districts of Uttar Pradesh, India, between 2013 and 2016. Previous research indicates that the intervention was not effective in improving the quality and coverage of maternal health services at the population level. This paper reports findings from an independent external process evaluation, conducted alongside the impact evaluation, with the aim of explaining the impact findings. It focuses on the main component of the programme, the "Sky" social franchise.MethodsWe first developed a theory of change, mapping the key mechanisms through which the programme was hypothesised to have impact. We then undertook a multi-methods study, drawing on both quantitative and qualitative primary data from a wide range of sources to assess the extent of implementation and to understand mechanisms of impact and the role of contextual factors. We analysed the quantitative data descriptively to generate indicators of implementation. We undertook a thematic analysis of the qualitative data before holding reflective meetings to triangulate across data sources, synthesise evidence, and identify the main findings. Finally, we used the framework provided by the theory of change to organise and interpret our findings.ResultsWe report six key findings. First, despite the franchisor achieving its recruitment targets, the competitive nature of the market for antenatal care meant social franchise providers achieved very low market share. Second, all Sky health providers were branded but community awareness of the franchise remained low. Third, using lower-level providers and community health volunteers to encourage women to attend franchised antenatal care services was ineffective. Fourth, referral linkages were not sufficiently strong between antenatal care providers in the franchise network and delivery care providers. Fifth, Sky health providers had better knowledge and self-reported practice than comparable health providers, but overall, the evidence pointed to poor quality of care across the board. Finally, telemedicine was perceived by clients as an attractive feature, but problems in the implementation of the technology meant its effect on quality of antenatal care was likely limited.ConclusionsThese findings point towards the importance of designing programmes based on a strong theory of change, understanding market conditions and what patients value, and rigorously testing new technologies. The design of future social franchising programmes should take account of the challenges documented in this and other evaluations.

Dataset Information

Franchising structure changes and shareholder value: Evidence from store buybacks and refranchising.

Supplementary information

Publications

Franchising structure changes and shareholder value: Evidence from store buybacks and refranchising.

Similar Datasets

OmicsDI is part of the ELIXIR infrastructure

Tweets