At the initial stages of this research, the assumption was that the franchised businesses perhaps should not be affected much by recession as there are multiple cash pools available inherent to the franchised business model. However, after analyzing the available data, it indicated otherwise, the stock price performance as discussed indicates a different pattern. The stock price data is analyzed with an unconventional tool, Weibull distribution and observations confirmed the presence of either a reverse trend in franchised business than what is observed for non-franchised or the franchised stock followed large food suppliers. There is a layered ownership and cash flow in a franchised business model. The parent company run by franchiser depends on the performance of child companies run by franchisees. Both parent and child companies are run as independent businesses but only the parent company is listed as a stock ticker in stock exchange. Does this double layer of vertical operation, cash reserve, and cash flow protect them better in recession? The data analyzed in this paper indicates that the recession effect can be more severe; and if it dives with the average market, expect a slower recovery of stock prices in a franchised business model. This paper characterizes the differences and explains the natural experiment with available financial data.
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