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. wherefore should winning franchisors leave rents with rightes? 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 unaffiliated firms, whereby the franchisee pays the franchisor (owner) for the right to transport the franchisors product and/or the right to handling his trademark at a given place and for a certain detail of time (Lafontaine, 1992). The line format of franchising has seen an considerable growth over the last 30 years, especially on the retail sector, and it has been a successful organisational form in delivering attend to products. According to Lafontaine and Shaw (1996), this business phenomenon was responsible for the 35% of all sell activity in 1986, and it accounted for about 13.5% of GDP in the U.S. Firms deposit on magnification by franchising rather than expansion by company-owned outlets 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 youthful popularity, a great pass over of academic literature has given a number of preference explanations about the being 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 explain how literature has essay to explain the humans of share franchise contracts. We will then examine the incentives of headspring established franchisors that leave rents with franchisees. At a later gift we will look at the franchise life-cycle and give likely explanations for the propensity of firms to franchise over time. Finally, the coating will... If you wa! nt to hold back a full essay, order it on our website: BestEssayCheap.com

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