Efficiency comparison of multiple brands within the same franchise: Data envelopment analysis approach

Abstract

As the restaurant franchising industry increasingly diversifies its brands, it is pivotal for a firm to accurately assess the efficiency of brands within its franchise system. This research compares and contrasts the efficiency of different brands belonging to the same franchisor using data envelopment analysis (DEA). The sample was drawn from three brands that are in operation under the same restaurant franchisor. The results of the study showed that the efficiency of each establishment, as well as the brands, differed significantly from each other. Managerial and strategic implications for franchisors and directions for future research are discussed.