Joonho Moon

Franchising effects on the lodging industry: optimal franchising proportion in terms of profitability and intangible value.

Franchising in the hospitality industry, particularly in the lodging business, has been an extensively studied topic. Yet the answers to critical questions have eluded researchers and practitioners: is franchising in the lodging industry profitable and a value-creating strategy? Moreover, what is the optimal proportion of franchising to attain certain financial outcomes? This study evaluates franchising in the lodging industry, and poses two key financial questions. Are franchised lodging firms more profitable and value-generating than non-franchised operations? And what is the optimal proportion of franchised and non-franchised units for a lodging firm to maximize its financial performance and value creation? The results of the two-way, random-effect regression model suggest that franchised lodging firms are more profitable than non-franchised firms. The study also finds that franchised firms create more intangible value than non-franchised firms. In addition, the authors identify optimal proportions of franchised and non-franchised properties that allow lodging firms to maximize profitability and intangible value. The results provide a critical perspective on the discussion of whether or not lodging firms should franchise and, if so, to what extent.

Determinants of restaurant internationalization: an upper echelons theory perspective

The purpose of this research is to account for the internationalization of restaurants. The conceptual framework of upper echelons theory is applied to identify the demographic determinants of internationalization among chief executive officers (CEOs).,Data from 30 restaurant firms for the period 1999-2013 were collected from a variety of sources, primarily Compustat and Execucomp, based on Standard Industrial Classification (SIC) code 5812, the annual 10-K and public information. A panel feasible generalized least squares model was used as the main instrument of analysis.,The findings indicate that the CEO gender and share ownership negatively affect the internationalization of restaurant companies, whereas size, the extent of franchising, the type of restaurant and stock options positively affect the degree of internationalization. Additionally, an inverted U-shaped relation exists between CEO tenure and the degree of internationalization.,The presented information may provide shareholders and boards of directors with valuable guidelines regarding the assignment of appropriate managers depending on the extent to which their companies are pursuing internationalization strategies.,Most studies in hospitality sectors have focused only on accounting-based measures to explain strategic decision-making, although proponents of upper echelons theory have argued that CEO attributes influence strategic decisions/changes. This study contributes to the literature on hospitality by identifying the effects of CEO characteristics on internationalization decisions.

THE EFFECT OF BOARD CLASSIFICATION IN THE RESTAURANT INDUSTRY

Previous literature suggests that classified boards of directors could impact firm performance in the context of firm-specific characteristics. In continuation of this discussion, this study investigates the effect of classified boards on firm value in the restaurant industry. Even though classified boards can reduce firm value because of higher monitoring costs, existing literature argues that classified boards are devoted to protecting investors and shareholders against opportunistic bids, which in turn increases their debt financing capabilities. Data from U.S. restaurant firms was analyzed by Compustat and RiskMetrics from 2007–2011 to investigate whether classified boards impact firm value in the restaurant industry. Our results indicate that classified boards of directors lower the value destruction of restaurant firms in terms of cost of debt. That is, cost of debt is lower in classified board firms, thereby reducing their negative impact on firm value. The implications and limitation of this research are also discussed.

Restaurant Internationalization and the Top Management Team

ABSTRACT The purpose of this research is to examine how upper echelon theory accounts for restaurant internationalization. In particular, this research identified five attributes drawn from upper echelon theory (age, tenure, formal education level, share ownership, and stock options) that explain restaurant internationalization. We collected information from various sources (e.g., LinkedIn, 10-K annual reports, ExecuComp, and Compustat) in examining 29 restaurant companies listed on U.S. stock exchanges (NASDAQ, NYSE, and AMEX) over the 2000–2013 period. Panel feasible generalized least squares was used for the data analysis. We found that tenure negatively affected restaurant companies’ degree of internationalization. However, the results also showed that education level and the value of top managers’ stock options encouraged them to engage in less internationalization.

Food choices and service evaluation under time constraints: the school lunch environment

Purpose Few states or local school districts mandate a minimum time for lunch. With increasing pressure on schools to maximize instructional time, many US students have witnessed continued reductions in the time allotted to lunch periods and, thus, less time to choose from an increasing number of food options. This study aims to investigate middle and high school students’ preferences regarding the time available for school lunches and whether the amount of time would affect their food choice preferences. Design/methodology/approach This study investigated students’ self-reported lunchtime constraints and food choice preferences through a paper-and-pencil survey. The categorical and ratio responses were analyzed using ordinal logistic regression. Findings Students responded that they rarely had enough time to eat school lunch and that the lunch line waiting time strongly or very strongly influenced their food choices. For the students for whom time available for lunch and time in the lunch line influenced what they ate, they were more likely to prefer limited food choices in several categories of the school lunch menu. Practical implications Foodservice professionals who wish to actively promote better nutrition might consider practical ways to reduce the foodservice wait time for students. While making healthier default options (e.g. a fruit or fresh vegetable side) could increase service convenience, time required for students to make informed meal choices should not be compromised. Originality/value Because lunch line waiting time is related to students’ food choices, schools need to review the number and types of food choices offered in terms of whether they encourage students to make more healthful choices. This study offers a unique perspective on the relationship between time and individual food choices in the school lunch environment and how this relationship affects the quality of children’s diets and their eating behaviors.

Factors Influencing Fixed Assets Investments in the U.S. Hospitality Industries

Although investments in fixed assets are important aspects of financial management, there are few studies focusing on this aspect of corporate finance in the hospitality literature. This study investigates factors that affect investment in fixed assets in both the lodging and restaurant industries. Investment in fixed assets for lodging firms was found to be negatively influenced by financial leverage; however, liquidity ratio had a positive relationship to investments. Particularly in the restaurant industry, financial leverage and firm size showed a negative relationship to investment in fixed assets, whereas profitability and liquidity ratios had a significant positive relationship with restaurant investment in fixed assets. Results of this study reemphasize that restaurants, although more profitable than lodging businesses, rely mostly on internal cash flows for their investments.

Study on the preference for capsule hotel attributes using a choice experiment

The main purpose of this study is to investigate the attributes of capsule hotels preferred by individuals. To this end, a choice experiment (CE) was adopted; a CE is a systematic method used to determine individual preferences with regard to goods and services. A well-known advantage of CEs is their ability to capture a pecuniary value for target attributes in the form of marginal willingness to pay (MWTP). By comparing the sizes of MWTPs, we can recognize the order of preference among attributes. Amazon Mechanical Turk was used to collect the study data. We examined the magnitudes of the degree of preferences for “additional services provided,” “accessibility,” and “price.” The findings indicate that price is negatively associated with capsule hotel choice, whereas accessibility and service are positively associated with capsule hotel choice.

Application of upper echelon theory for corporate social responsibility dimensions: Evidence from the restaurant industry

ABSTRACT This study applies upper echelon theory and validates its conceptual framework by investigating chief executive officers’ observable determinants (e.g., the age, tenure, and formal education of top managers) of corporate social responsibility (CSR) in the restaurant industry. Multiple CSR dimensions (e.g., operational, non-operational, community, diversity, employee, environment, and product) are examined through fixed effects regression. The results indicate that older and highly educated CEOs who serve more stakeholders perform fewer CSR activities, whereas longer tenured CEOs who serve more stakeholders perform more CSR activities. Consequently, non-operational, community-, diversity-, employee-, and environment-related CSR activities are significantly explained by the proposed attributes. By validating both the theoretical perspectives of upper echelon theory and the role of stakeholder demands in CSR decisions, this research can contribute to expanding the CSR and upper echelon literature to the restaurant industry.

Attributes of the coffee shop business related to customer satisfaction

ABSTRACT The purpose of this study is to investigate the antecedent attributes of customer satisfaction in the coffee shop business domain. Based on the literature, this research examines “atmosphere,” “employee attitudes,” “information technology service (IT service),” and “coffee quality” in relation to “satisfaction” and “loyalty.” A total of 277 observations were obtained from data collected using Amazon Mechanical Turk. For the data analysis, confirmatory factor analysis and structural equation modeling were conducted to examine the validity of the measurements and to understand the structural relationship. The results showed that the hypothesized antecedent variables were statistically significant to account for satisfaction. In particular, taste was identified as the most influential attribute accounting for satisfaction. Moreover, a significant relationship between “satisfaction” and “loyalty” was identified.