IMOFranchising

This section presents the demographic and socio-cultural features shared by those individuals that exhibit the different dimensions of entrepreneurial activity considered in this document. Before going further we must define what is meant by entrepreneurial activity. For the purpose of this report, we consider two dimensions of entrepreneurial activity. First, we consider those respondents who are potential franchisees (involved in pre start-up entrepreneurial activities). In this case, a person is said to be a potential franchisee if he/she is involved in pre start-up activities, i.e., if the person has recently undertaken (over the previous 12 months) any concrete efforts, (such as the development of a business plan, the search for finance, etc.) aimed at starting a business without receiving any monetary reward for this activity. From Table 1 we observe that potential franchisees who are involved in pre start-up entrepreneurial activities are 7.87% in the sample. Results also indicate that women show a statistically significant higher rate of franchising intention as compared to the male sub-sample.

Table 1. Descriptive statistics according to the dimensions of entrepreneurial activity

Note: The mean test compares the results between individuals who are either involved in pre start-up entrepreneurial activities or recent entrepreneurs and those who are not entrepreneurially active. Values in brackets indicate standard deviation. *, **, *** indicates significance at the 0.10, 0.05 and 0.01 level (Kruskal-Wallis test).

We now examine the differences in the demographic variables by comparing the results between entrepreneurially active and non-entrepreneurially active individuals. Results from Table 1 indicate that the proportion of men involved in pre start-up entrepreneurial activities is statistically significant lower relative to the gender distribution in the non-entrepreneurially active sub-sample (46.49% and 56.48%, respectively). Conversely, we observe that the proportion of male recent entrepreneurs (58.62%) is higher than that shown by non-entrepreneurially active men, however, the lack of statistical significance prevent us to make ay conclusive comment on this issue. Regarding individual’s age, results from Table 1 indicate that entrepreneurial activities (pre start-up entrepreneurial activities and recent entrepreneurship) are not affected by individual’s life cycle (expressed in years). Nevertheless, academic literature states that the link between age and entrepreneurial activity is double sided. On the one hand, younger individuals often have the greater drive and the needed ambition to persevere through the entrepreneurial process. On the other hand, older individuals usually have greater tangible and intangible resources essential for successful business creation (Katz, 1994, Singh and Verma, 2001 and Lafuente, et al, 2007). Therefore, we consider in the analysis age intervals aiming to examine the relationship between entrepreneurial activities and age.
Interestingly, results indicate that entrepreneurial activities increase respect to age, but beyond a crucial threshold this relationship becomes negative (entrepreneurial activities decrease respect to age). For the potential franchisees, i.e., individuals who are involved in pre start-up entrepreneurial activities, we observe that the relationship between this entrepreneurial dimension and age is positive up to 35 years. Individuals younger than 25 years old show a pre start-up entrepreneurial activities rate of 13.86%, whereas this rate rises to 20.13% for people between 31 and 35 years (the highest rate in the distribution). Nonetheless, for people over 35 years old pre start-up entrepreneurial activities decrease, and individuals between 41 and 45 years old exhibit the lowest rate of pre start-up entrepreneurial activities (10.60%).
Similar results are found in the case of recent entrepreneurs. In despite of the rate of recent entrepreneurship is 5.52% for individual between 31 and 36 years old, this rate moves from 5.94% for individuals below 25 years old to 10.11% in the case of individuals between 36 and 40 years old. For people over 40 years old the average rate of recent entrepreneurs is 8.81%.
Finally, we include in the analysis a sociological variable that has recently received great attention by academic researchers who study entrepreneurship, i.e., the personal knowledge of entrepreneurs in the family circle (Role-Model effect). Hence, academic research supported by empirical studies developed by Gibson (2004), Wagner (2004) and Lafuente, et al (2007) postulates that the presence of entrepreneurs in the person’s social circle (in this case, the family) may act as stimuli to entrepreneurial activities.

Table 2. Descriptive statistics according to the dimensions of entrepreneurial activity

Note: The mean test compares the results between individuals who are either involved in pre start-up entrepreneurial activities or recent entrepreneurs and those who are not entrepreneurially active. Values in brackets indicate standard deviation. *, **, *** indicates significance at the 0.10, 0.05 and 0.01 level (Kruskal-Wallis test).

In what concerns the presence of entrepreneurs in the family circle (Role-Model effect), results presented in Table 2 indicate that potential franchisees show a statistically significant grater rate or family entrepreneurs (38.60%) than non-entrepreneurially active individuals (24.93%). On the other hand, family entrepreneurs are present in the 20.69% of recent entrepreneurs in the sample. We also find that for potential franchisees as well as recent entrepreneurs, the father is the main entrepreneurial referent (22.81% and 15.09%, respectively), and these values are higher than those shown by non-entrepreneurially active individuals in the sample (12.15%). Results from the sample also indicate that the second ranked entrepreneurial referent is the individual’s mother, and despite the lack of significance, individuals involved in pre start-up entrepreneurial activities report the greatest proportion of mother entrepreneurs (7.90%).
Also, it can be seen in Graphic 3 that the relationship between the presence of family entrepreneurs and age is negative. Thus, family entrepreneurs are present in the 37.13% of individuals below 25 years old, whereas this rate falls to 11.67% for individuals older than 50 years old.

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