An economic analysis of contractual relationships in franchising systems with case studies
Fieldwork methods are used to analyse the nature of
franchise systems in the UK. These systems are viewed in
terms of their contractual relationships following
theoretical approaches suggested by the economics of
organisation, including agency analysis. In particular,
product, brand and specialised-input franchises are
identified and fee schedules are placed in the context of
the wider franchise contract. The fieldwork covers 19
case studies of UK franchising systems.
The thesis contains a predictive theory of
franchising. This identifies initial investments which
franchisees undertake as hostages with screening and
bonding properties for the franchisor. These hostages
influence monitoring costs. The thesis makes an
operational, use of modern transaction-cost ideas.