Brand and performance signals in the choice of franchise opportunities

Abstract

When choosing a franchise chain, potential franchisees must incorporate into their decision process the signals of franchise chain quality being sent to the market by the franchisor. Some of these signals along with potential franchisees' choices of franchise chain are analyzed. The results show that brand value and franchisee performance were the key signals used by Spanish franchisees during the period 2002 through 2008, when deciding to open a franchise outlet. The aim of this study was to contribute to strengthening the relationship between entrepreneurship and franchising in Spain from an empirical viewpoint.

Keywords:

• entrepreneurship
• signaling
• franchising
• panel data