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

Present an scotch analysis of the sell certify contract. wherefore should winning franchisors leave rents with certificationes? 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 nonparasitic firms, whereby the franchisee pays the franchisor (owner) for the right to transport the franchisors product and/or the right to accustom his trademark at a given place and for a certain detail of time (Lafontaine, 1992). The line format of franchising has seen an abundant growth over the last 30 years, especially on the retail sector, and it has been a successful organisational form in delivering serve healthful 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 intrust on magnification by franchising rather than expansion by co mpany-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 young popularity, a great pass over of academic publications has given a number of preference explanations about the mankind 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 ess! ay to explain the earthly concern of share franchise contracts. We will then examine the incentives of well established franchisors that leave rents with franchisees. At a later tier we will look at the franchise life-cycle and give practicable explanations for the propensity of firms to franchise over time. Finally, the coating will... If you want to accomplish a full essay, order it on our website: BestEssayCheap.com

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