Empirical research - Coursework Example

The brands of pizza hut, KFC, Mexican food restaurant of Taco Bell and Long John Silver outlets are among the few brands that have been acquired by all these restaurants owners. Over the past years, Yum has been involved in many mergers and acquisitions and this raised a concern of wanting to know more and therefore will express it in an ‘expounding’ study in form of exploration to tackle the causes and effects of Mergers & Acquisition in franchising. It is clear that, in as much as many companies have a variety of reasons for joining with mergers and acquisitions not all mergers get to succeed.

Research show that, those who get lucky to succeed, do not get rates greater than fifty percent, from the two different methods used to evaluate on the success of acquisition or a merger. Among the chosen methods, the commonest one used is quantitative where; the performance rate in the share of the companies merging is taken and compared with that of the results of associate companies that want to merges with it. The other method is qualitative, and is usually evident when particular representatives of the companies are interviewed to see whether the merger can be proved successful.

Businesses that join the scheme of mergers and acquisitions normally target the economic benefits, which are taken to be a way to grow benefits in synergy and a decrease in costs and form a grounds or room for mergers and acquirers to make a number of decisions. This is one drive that keeps the urge for companies to get involved in acquisition or merger. It refers to an event the combined company makes a lot of profit than the total of the two separate companies. When a merger or acquisition has a positive acquisition value (NAV), it is supposed to be economically.

The NAV is defined as Mclean (2003), If this is positive, then the merged