Services vs retail chains: are there any differences? Evidence from the French franchising industry

Purpose - This paper aims to review the differences between retailing and services in the particular context of franchised chains in order to highlight the main differences between retail chains and services chains. Design/methodology/approach - The existence of such differences is tested in the French context because its franchising sector is the most developed one in Europe as far as the number of chains is concerned. The empirical study deals with 530 chains among which 228 are services and 302 are retail. Findings - Some significant differences between services and retail chains are underlined in terms of age, plural form, franchising fees, franchising and advertising royalties, and contract length. Additionally to these significant differences, the new trend in franchising seems to consist in developing more services chains than retail chains. Research limitations/implications - This paper has some limitations. The focus is on only one country: France. A multi- countries study could be useful to confirm these differences or highlight other ones. Furthermore, a more precise classification about the sectors of activities could underline other differences. Practical implications - This paper can help the prospective franchisee to better differentiate the services chains and the retail ones, and better understand their particular features. Furthermore, the new franchisor can use these descriptive results to compare his/her practices with the average practices within the sector he/she is in, above all in terms of contract terms: franchising fees, franchising and advertising royalties, and contract duration. Originality value - This paper highlights differences between different kinds of franchised chains: retail vs services. These differences have not been underlined in previous research.