Table 1
Cox Regressions Predicting Failure of New Franchise Systems (1979–1996)

Variables

Model 1

Model 2

Model 3

B

S.E.

Exp.B

B

S.E.

Exp.B

B

S.E.

Exp.B

Institutional Variables

 (Ln) Age

#

-0.937

**

0.122

0.39

-0.925

**

0.123

0.40

 (Ln) Size

#

-0.472

**

0.063

0.62

-0.479

**

0.063

0.62

 Rank

#

-0.003

**

0.001

0.99

-0.003

**

0.001

0.99

 Termination

#

-0.655

**

0.182

0.52

-0.629

**

0.184

0.53

 Termination X Company

#

0.017

**

0.004

1.02

0.017

**

0.004

1.02

 Registration

#

-0.556

0.390

0.57

-0.644

0.394

0.53

 Registration X Capital

#

0.148

+

0.089

1.16

0.166

+

0.090

1.18

Economic and Ecological
Controls

 Franchise Fee

0.002

0.003

1.01

0.004

0.003

1.01

0.003

0.003

1.01

 Royalty Rate

-0.026

0.020

0.97

-0.015

0.023

0.99

-0.010

0.023

0.99

 (Ln) Capitalization

-0.105

+

0.063

0.90

-0.214

**

0.079

0.81

-0.201

*

0.080

0.82

 Financing

-0.023

0.165

0.98

0.226

0.165

1.25

0.234

0.166

1.26

 Company

0.022

**

0.005

1.02

-0.015

*

0.006

0.99

-0.018

*

0.007

0.98

 System Growth

-0.001

0.001

0.99

0.001

0.001

1.01

-0.001

**

0.001

0.99

 Company X System

0.001

**

0.001

1.01

0.001

**

0.001

1.01

0.001

**

0.001

1.01

 Company X Capital

-0.002

+

0.001

0.99

0.003

*

0.001

1.01

0.003

+

0.001

1.01

 Fee Growth

0.001

**

0.001

1.01

-0.001

0.001

0.99

0.001

0.001

1.01

 Royalty Growth

0.001

0.002

1.01

0.001

0.002

1.01

0.001

0.002

1.01

 Capital Growth

0.001

0.001

1.01

0.001

*

0.001

1.01

0.001

*

0.001

1.01

 Financing Change

0.522

**

0.175

1.69

0.295

+

0.170

1.34

0.286

+

0.170

1.33

Interactions with Time

 Company X Time

#

#

0.001

0.001

1.01

 System Growth X Time

#

#

0.001

**

0.001

1.01

Other Controls

 Economic Growth

0.004

0.006

1.01

-0.004

0.008

0.99

-0.003

0.008

0.99

 Amusement

1.049

+

0.562

2.86

0.176

0.581

1.19

0.144

0.583

1.15

 Automobile Rental

1.275

0.813

3.58

1.392

+

0.818

4.02

1.356

+

0.818

3.88

 Automobile Service

0.319

0.430

1.38

0.374

0.435

1.45

0.344

0.435

1.41

 Business Services

0.208

0.434

1.23

0.538

0.434

1.71

0.514

0.434

1.67

 Building Products

0.139

0.473

1.15

0.672

0.495

1.96

0.676

0.495

1.97

 Children’s Products

0.162

0.695

1.18

-0.224

0.699

0.80

-0.256

0.699

0.77

 Clothing

0.394

0.455

1.48

0.269

0.464

1.31

0.253

0.465

1.29

 Desserts

0.083

0.557

1.09

0.313

0.568

1.37

0.285

0.569

1.33

 Educational Services

1.310

*

0.594

3.71

1.246

*

0.602

3.48

1.197

*

0.602

3.31

 Employment Agencies

-0.155

0.472

0.86

0.343

0.480

1.41

0.245

0.484

1.28

 Health and Beauty

0.200

0.444

1.22

1.592

**

0.442

4.91

1.551

**

0.444

4.72

 Home Furnishings

0.880

+

0.508

2.41

0.944

+

0.518

2.57

0.929

+

0.519

2.53

 Lodging

1.235

*

0.561

3.44

1.319

*

0.577

3.74

1.309

*

0.578

3.70

 Maintenance

0.184

0.462

1.20

0.276

0.461

1.32

0.187

0.466

1.21

 Miscellaneous

-0.950

0.710

0.39

-0.278

0.733

0.76

-0.271

0.732

0.76

 Miscellaneous Retail

0.948

*

0.467

2.58

1.052

*

0.475

2.86

1.038

*

0.475

2.82

 Miscellaneous Services

0.121

0.574

1.13

0.425

0.583

1.53

0.475

0.579

1.61

 Pet Services

-1.080

1.082

0.34

-1.830

+

1.088

0.16

-1.801

+

1.088

0.17

 Photography and Video

1.543

**

0.450

4.68

1.591

**

0.457

4.91

1.565

**

0.457

4.78

 Printing

-0.133

0.561

0.88

0.065

0.565

1.07

0.039

0.566

1.04

 Quick Service

0.844

*

0.411

2.33

0.584

0.417

1.79

0.552

0.417

1.74

 Real Estate

-0.204

0.715

0.82

-0.695

0.720

0.50

-0.688

0.720

0.50

 Restaurants

0.629

0.439

1.88

0.480

0.445

1.62

0.433

0.447

1.54

 Retail Food

1.227

*

0.507

3.41

0.635

0.513

1.89

0.600

0.514

1.82

 Shipping and Packing

0.741

0.513

2.10

0.306

0.516

1.36

0.293

0.516

1.34

 Personal Services

0.678

0.450

1.97

0.509

0.451

1.66

0.501

0.450

1.65

-2 Log Likelihood

4574.56

4298.16

4283.85

Chi-square

180.08

*

415.51

**

441.21

**