CASE CHAPTER 14: QUANTITATIVE DATA ANALYSIS THE SUBWAY FAMILY In 1965, a young man named Fred DeLuca wanted to become a medical doctor. Looking for a way to pay for his education, a family friend Peter Buck advised him to open a submarine sandwich shop. With a loan of $1,000, Peter offered to become Freds partner. Their first submarine sandwich shop opened in Bridgeport, Connecticut in August, 1965. Soon after opening their first shop they set a goal of having 32 sandwich shops opened in 10 years. Business went well and in 1974, Fred and Peter owned and operated 16 submarine sandwich shops throughout Connecticut. However, they realized that they would not reach their goal 32 shops - in time. Therefore they began franchising, launching the Subway brand into a period of substantial growth. Today, Subway is one of the fastest growing franchises in the world with approximately 34,695 restaurants in 98 countries as of June 2014. Franchising is the practice of using another firm's successful business model. For Fred and Peter, franchising was an alternative to building 'chain stores' to distribute submarine sandwiches; they allowed others to use their business model and to run a Subway submarine sandwich shop in return for an agreed-upon fee. Subway's main operations office is in Milford, Connecticut, and five regional centers support Subway's growing international operations. The regional office for European franchises is located in Amsterdam, The Netherlands. Fin Green is a Senior Manager at the regional office for European franchises. Fins main challenge is how best to maintain control over Subways franchisees in Europe without excessively constraining their entrepreneurial spirit. He has asked Bart Veldkamp, a master student from Tilburg University specializing in Strategic Management, to investigate this issue. Bart has developed a conceptual model based on a paper of Strutton, Pelton, and Lumpkin (1993). The dependent variable in the model is Satisfaction with the Franchisor; the independent variables in the model are Innovation, Pressure, Cohesion, Recognition, Autonomy, and Fairness. To test this model Jan has created the following questionnaire.

Mark the circle that best describes your feelings at this particular moment. Please answer every question. COHESION 1. In this company, franchisees pitch in to help each other out Totally disagree 0 0 0 0 0 0 0 Totally agree 2. In this company, franchisees take a personal interest in each other Totally disagree 0 0 0 0 0 0 0 Totally agree 3. There is a lot of team spirit in this company Totally disagree 0 0 0 0 0 0 0 Totally agree 4. Franchisees tend to get along well with each other Totally disagree 0 0 0 0 0 0 0 Totally agree 5. I feel like I have a lot in common with other franchisees Totally disagree 0 0 0 0 0 0 0 Totally agree RECOGNITION 6. I can count on a pat on the back when the franchise performs well Totally disagree 0 0 0 0 0 0 0 Totally agree 7. The only time I hear about my franchise performance is when I make a mistake Totally disagree 0 0 0 0 0 0 0 Totally agree 8. My franchisor knows what my strengths are and lets me know it Totally disagree 0 0 0 0 0 0 0 Totally agree 9. My franchisor is quick to recognize good performance Totally disagree 0 0 0 0 0 0 0 Totally agree AUTONOMY 10. I organize the franchise as I see fit Totally disagree 0 0 0 0 0 0 0 Totally agree 11. I set the work standards for my franchise Totally disagree 0 0 0 0 0 0 0 Totally agree 12. I make most of the decisions that affect the way my franchise performs

Totally disagree 0 0 0 0 0 0 0 Totally agree 13. I schedule my own work activities Totally disagree 0 0 0 0 0 0 0 Totally agree 14. I determine my own operational routine PRESSURE 15. I have too much work and too little time to do it Totally disagree 0 0 0 0 0 0 0 Totally agree 16. The franchise arrangement provides a relaxed working environment Totally disagree 0 0 0 0 0 0 0 Totally agree 17. I feel like I never have a day off Totally disagree 0 0 0 0 0 0 0 Totally agree 18. In this franchise, too many people get "burned out" out by demands of the job Totally disagree 0 0 0 0 0 0 0 Totally agree FAIRNESS 19. I can count on a fair shake from my franchisor Totally disagree 0 0 0 0 0 0 0 Totally agree 20. The objectives my franchisor sets for me are reasonable Totally disagree 0 0 0 0 0 0 0 Totally agree 22. If my franchisor terminates a franchise relationship, the franchisee was probably at fault Totally disagree 0 0 0 0 0 0 0 Totally agree 23. My franchisor does not play favorites Totally disagree 0 0 0 0 0 0 0 Totally agree SATISFACTION WITH FRANCHISOR 24. Generally speaking, I am very satisfied with my franchisor Totally disagree 0 0 0 0 0 0 0 Totally agree GENERAL QUESTIONS

25. What is your age? 0 < 25 years 0 25 35 years 0 35 -45 years 0 45 55 years 0 > 55 years 26. What is your gender? 0 Male 0 Female 27. What is the highest level of education you have completed? 0 Less than High School 0 High School/GED Equivalent 0 College Degree 0 Masters Degree 0 Doctoral Degree 28. How long have you been a franchisee? 0 < 5 years 0 5 10 years 0 10 -15 years 0 15 25 years 0 > 25 years THIS WAS THE FINAL QUESTION OF THIS QUESTIONNAIRE. THANK YOU VERY MUCH FOR YOUR COOPERATION! During the last few weeks, Bart has been very busy collecting data from a representative sample of the population. The next step is to analyze these data. QUESTIONS 1. Before Bart can start analyzing the data, some preliminary steps need to be completed. Discuss these steps briefly. 2. To get a feel for the data Bart wants to obtain some measures of central tendency and dispersion for each single item in the questionnaire. a. Which measures would you use to provide an overview of the items representing the dependent variable and the independent variables of Barts model (question 1-24)? Why? b. Which measures would you use to provide an overview of the sample characteristics (question 25-28)? Why? 3. In hindsight, Bart is not happy with the way he has measured the age of his participants and for how long they have been a franchisee. What could be the problem?

4. Bart has made 28 pie charts to provide a visual display of the data. Fin Green has told Bart that he also would like to see histograms and box-and-whisker plots for all the items. a. What is a histogram? b. What is a box-and-whisker plot? c. Do you believe that it is a smart idea to provide histograms and box-and- whisker plots for all the items? Why (not)? 5. Because the variables in Barts model were measured with multi-item scales, the consistency of the participants answers to the scale items has to be tested for each measure. Bart has decided to use Cronbachs alpha to test the inter-item consistency of his measures. However, before submitting the data for reliability tests Bart has to reverse the scores of some of the items in his questionnaire. a. What is reverse scoring and why is it necessary? b. Which of the items in the questionnaire have to be reverse-scored? 6. The reliability of the cohesion measure is presented in the following tables. Reliability Statistics Cronbach's Alpha N of Items .804 5 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted cohesion1 11.3474 12.570 .697 .734 cohesion2 11.0947 14.533 .410 .818 cohesion3 11.8737 11.792 .719 .723 cohesion4 12.1895 12.304 .712 .728 cohesion5 11.7684 14.052 .434 .814 a. What do you conclude on the basis of these tables? b. Once that Bart has established that the inter-item consistency of a measure is satisfactory, the scores of the original items can be combined into a single score. How?

c. Bart has combined the scores of the first 23 items into the following variables: Cohesion, Recognition, Autonomy, Pressure, and Fairness. Now he wants to establish the nature, direction, and significance of the bivariate relationships between these variables. How can Bart examine the relationships between these variables? REFERENCES Strutton, D., L. Pelton, and J. Lumpkin (1993), The Influence of Psycholigical Climate on Conflict Resolution Strategies in Franchise Relationships, Journal of the Academy of Marketing Science, 21, 207-216. Subway (2011). About us. Retrieved June, 15th, 2011 from http://www.subway.com/subwayroot/ AboutSubway/index.aspx