Present an economic analysis of the retail franchise contract. Why should successful franchisors leave rents with franchisees?

Present an scotch analysis of the retail certify contract. why should winning franchisors leave rents with certifyes? Would you expect the attractiveness of franchising to the franchisor to fall oer date? A franchise agreement is defined as a contractual agreement between two nonsymbiotic firms, whereby the franchisee pays the franchisor (owner) for the right to transport the franchisors product and/or the right to practice session his trademark at a given place and for a certain detail of time (Lafontaine, 1992). The line format of franchising has seen an ample growth over the last 30 years, especially on the retail sector, and it has been a successful organisational form in delivering receipts products. According to Lafontaine and Shaw (1996), this business phenomenon was responsible for the 35% of all retail activity in 1986, and it accounted for about 13.5% of GDP in the U.S. Firms hope on magnification by franchising rather than expansion by company-owned outlet s due to the profitable nature of the franchise contract, where the franchisee as a residue claimant has more than incentives to monitor than salaried manager. Given this late popularity, a great pass over of academic belles-lettres has given a number of preference explanations about the worldly concern of franchising and the nature of the franchising contracts.

This study will digest the nature of the retail franchise contracts, where the franchisee as a residual claimant has more incentives than a company-owned manager. The discussion will present an economic analysis of franchise contracts, and consequently expla in how literature has essay to explain the ! innovation of share franchise contracts. We will then examine the incentives of puff up established franchisors that leave rents with franchisees. At a later set we will look at the franchise life-cycle and give doable explanations for the propensity of firms to franchise over time. Finally, the coating will... If you want to uprise a full essay, order it on our website: OrderCustomPaper.com

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