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An Assessing of Franchisor's Firm Performance Based on Data Envelopment Analysis

DEA 분석을 통한 프랜차이즈 기업의 평가

  • Kim, Seonmin (Dept. of Business Administration, Seoultech)
  • 김선민 (서울과학기술대학교 글로벌경영학과)
  • Received : 2014.10.20
  • Accepted : 2014.12.23
  • Published : 2014.12.31

Abstract

Due to the severe market conditions, pre-entrepreneur seeks to start their business through franchise company. This paper, using the data envelopment analysis(DEA) method, examines efficiency of a group of franchise company in order to provide efficiency information with pre-entrepreneur. Output-oriented DEA model is applied in the investigation of efficiency, and the overall efficiency score is decomposed into pure technical efficiency and scale efficiency. The input variables selected to evaluate the efficiency are franchise deposit, franchise contribution cost and the output variables are sales and number of franchises, and length of business. The results of this paper show franchise industry have the low level of overall efficiency and the main sources of inefficiency is found technical rather than scale. As a result, this paper provides not only the current status of efficiency information of a franchise with pre-entrepreneur but also give warning when they sign-up with franchise business.

Acknowledgement

Supported by : 서울과학기술대학교

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