Abstract
Due to the severe labor market conditions, new business startups through franchising are getting popular in Korea. However, it is difficult to evaluate which franchise headquarters have superiority in management on the basis of publicly available information resources related to franchise headquarters. This paper, using the data envelopment analysis (DEA) method, proposes full results of DEA analysis such as efficiency scores, pure technical efficiency scores, and scale efficiency scores, and slacks in inputs and outputs of inefficiency headquarters. Output-oriented DEA model is applied to a group of franchisor's firm in the foodservice industry in Korea. The input variables are franchise deposit, franchise fees, and the output variables are total number of stores, duration of the franchise, and annual sales revenue. We find that the main inefficiency is caused by the pure technique for switching the inputs to the outputs. In addition, it can be seen that inefficiency in scale is also huge. As a result, this paper provides not only the current status of efficiency information of a foodservice franchisor's headquarter but also gives insight of Korean foodservice franchise business.
| Original language | English |
|---|---|
| Pages (from-to) | 6115-6120 |
| Number of pages | 6 |
| Journal | Information (Japan) |
| Volume | 17 |
| Issue number | 12 |
| State | Published - 1 Dec 2014 |
Keywords
- Data envelopment analysis
- Efficiency score
- Entrepreneurships
- Korean foodservice franchise industry
- Performance evaluation
