PERFORMANCE AND RISK AS SIGNALS FOR SETTING UP A FRANCHISED BUSINESS

Potential franchisees who wish to start up a business need to seek information signals. The aim of this paper is to analyze the relationship between performance and risk as signals of the quality of the franchise chains and the decision to choose one of them taken by the potential franchisee who wis...

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Bibliographic Details
Published in:Journal of small business strategy 2013, Vol.23 (2), p.41
Main Authors: Calderón-Monge, Esther, Huerta-Zavala, Pilar
Format: Article
Language:English
Subjects:
Adverse selection
Decision making
Entrepreneurs
Entrepreneurship
Franchisees
Franchises
Franchising
Generalized method of moments
Hypotheses
Innovations
Risk
Small business
Studies
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Summary:Potential franchisees who wish to start up a business need to seek information signals. The aim of this paper is to analyze the relationship between performance and risk as signals of the quality of the franchise chains and the decision to choose one of them taken by the potential franchisee who wishes to set up a business for the first time via franchising. The results show that performance and risk operated as recognized signals for choosing a franchise chain among those which were operating in Spain during 2002-2008.
ISSN:1081-8510
2380-1751