Survival of new firms in the Brazilian franchising segment: an empirical study

This paper investigates the survival patterns of Brazilian franchising firms for the period 1994-1999. First, we considered the (percentage) survival of newly created franchisors in the following years. Survival functions were obtained by means of the Kaplan-Meier estimator for the selected sectors and they indicated sharp declines in the survival rates over time but with differential patterns across sectors. Finally, an econometric analysis based on the Cox proportional hazard model considered the explanatory variables pertaining to size, age and support regarding the legal aspects, location choice and training. The evidence indicates that the supports provided by the franchisor have a positive impact on the probability of survival of new firms, whereas there is partial evidence favoring a positive effect of firm size on survival.