This paper deals with the governance and financial performance issues in the context of French Fashion retail companies. The research has for purpose to analyze the ultimate effect of organizational form choices on retail network’s financial performance. In this study, we analyze the influence of the organizational choices on the financial performance at the network level. We consider (i) three forms used in isolation: networks operating company-owned stores, franchisee-owned stores or stores-within-a-store, (ii) three dually-organized forms i.e. dual forms mixing two of the three forms: networks operating company-owned and franchised stores, company-owned and stores-within-a-store or franchised stores and stores-within-a-store and (iii) a combined form associating the three ones: networks operating company-owned units, franchisee-owned units and stores-within-a-store. In doing so, the research considers a broader range of organizational forms than the ones usually analyzed in the literature. How can we explain theoretically that an organizational form yields a better financial performance? Prior research provides indirect theoretical arguments and evidence of how each organizational form may affect financial performance. The benefits and drawbacks associated to company-ownership and franchising as dominant organization forms have been extensively studied, mainly in the light of three theoretical views – the resource scarcity theory, the contractual theories and the resource based view. They suggest three reasoning on how resources can be acquired and spread out thanks to the various organizational forms. When comparing dual forms to dominant forms, we suggest extending the synergistic view of dual franchising forms to the two other dually-organized forms. Finally, as the advantages and draw-backs of forms associating the three pure forms have not been analyzed in the literature so far, the rationale for such combined form is analyzed in the light of the theoretical view used for the choice of internationalization modes used in combination. They could allow to increasing substantially the flexibility of the strategic decisions as well as the marketing efficiency with more customer targets being served. But too much diversification could generate problem of operational efficiency with a network being too dispersed and requiring too much capabilities. With this theoretical framework, the research extends existing views on retail organizational forms and their expected outcomes in terms of financial performance. To test our hypotheses, we study a sample of mostly privately-held French retail companies from the fashion sector (n= 170), using two criteria of performance - profit margin ratio and return on assets. The issue consists in distinguishing the two different dimensions of a retail organisation form – its nature and its degree of concentration – in a consistent manner. To do so, we follow a two-steps approach on the basis of a conventional mathematical method yet uncommon in business academic research. First, we transform the triplet of the percentage of stores in each organizational form in Cartesian coordinates; second, we transform Cartesian coordinates in polar coordinates in order to allow studying the two dimensions of concentration and nature of a retail organization form. In doing so, the research uses an innovative empirical method. Descriptive statistics and ordinary least squares (OLS) regression model are used to empirically examine the influence of the organizational forms on the financial performance at the network level. Main results show that none of the purely or dual forms tends to generate better financial performance than any other, even though descriptive statistics exhibit important differences in terms of performance among organizational forms. But the results highlight that networks combining company-ownership, franchising and stores-within-a-store generate better financial performance (higher profit margin ratio and higher return on assets), up to a certain point, compared to dual forms and pure forms. In doing so, the research provides further evidence on the question if any organizational form is superior in terms of financial performance.
