IDEAS home Printed from https://ideas.repec.org/a/sae/ecolab/v32y2021i1p39-64.html
   My bibliography  Save this article

Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada

Author

Listed:
  • Mark D Easton

    (York University, Canada)

  • Andrea M Noack

    (Ryerson University, Canada)

  • Leah F Vosko

    (York University, Canada)

Abstract

Using an administrative dataset from the Ontario Ministry of Labour, we investigate three hypotheses about employment standards violations among franchised businesses: (1) franchisees have a higher probability of violating employment standards than other businesses, (2) franchisees have a higher probability of monetary/wage-related ES violations than other businesses, and (3) franchisees have a lower probability of repaying monetary/wage-related violations than other businesses. The results of our statistical models suggest that overall, franchisees are indeed more likely to violate ES, have a higher probability of monetary/wage-related violations, and are less likely to repay such violations. However, the results vary substantially by industry. While franchisees had only marginally higher probabilities of an ES violation in two of the seven industry-groups examined, five of the seven industries showed substantially higher probabilities of a monetary violation. The results also show that franchisees in three industry groups (retail, accommodation and food services, and education, public administration, healthcare and social services) are particularly prone to monetary violations. JEL codes: J83, J88, J89

Suggested Citation

  • Mark D Easton & Andrea M Noack & Leah F Vosko, 2021. "Are franchisees more prone to employment standards violations than other businesses? Evidence from Ontario, Canada," The Economic and Labour Relations Review, , vol. 32(1), pages 39-64, March.
    • Handle: RePEc:sae:ecolab:v:32:y:2021:i:1:p:39-64
    DOI: 10.1177/1035304620961862
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1035304620961862
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1035304620961862?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. L'industria, 2020. "Call for Papers," L'industria, Società editrice il Mulino, issue 4, pages 787-801.
    2. Blair,Roger D. & Lafontaine,Francine, 2011. "The Economics of Franchising," Cambridge Books, Cambridge University Press, number 9780521775892, January.
    3. Leah F. Vosko & John Grundy & Eric Tucker & Mark P. Thomas & Andrea M. Noack & Rebecca Casey & Mary Gellatly & Jennifer Mussell, 2017. "The compliance model of employment standards enforcement: an evidence-based assessment of its efficacy in instances of wage theft," Industrial Relations Journal, Wiley Blackwell, vol. 48(3), pages 256-273, May.
    4. Alan B. Krueger & Orley Ashenfelter, 2022. "Theory and Evidence on Employer Collusion in the Franchise Sector," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 324-348.
    5. James G. Combs & David J. Ketchen Jr & Jeremy C. Short, 2011. "Franchising Research: Major Milestones, New Directions, and its Future within Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 35(3), pages 413-425, May.
    6. L'industria, 2020. "Call for papers," L'industria, Società editrice il Mulino, issue 1, pages 173-187.
    7. Stephen Clibborn & Chris F Wright, 2018. "Employer theft of temporary migrant workers’ wages in Australia: Why has the state failed to act?," The Economic and Labour Relations Review, , vol. 29(2), pages 207-227, June.
    8. Hoy, Frank & Shane, Scott, 1998. "Franchising as an entrepreneurial venture form," Journal of Business Venturing, Elsevier, vol. 13(2), pages 91-94, March.
    9. Francine Lafontaine, 2014. "Franchising: Directions for Future Research," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 21(1), pages 21-25, February.
    10. Shane, Scott A. & Hoy, Frank, 1996. "Franchising: A gateway to cooperative entrepreneurship," Journal of Business Venturing, Elsevier, vol. 11(5), pages 325-327, September.
    11. MinWoong Ji & David Weil, 2015. "The Impact of Franchising on Labor Standards Compliance," ILR Review, Cornell University, ILR School, vol. 68(5), pages 977-1006, October.
    12. Ginger Zhe Jin & Phillip Leslie, 2009. "Reputational Incentives for Restaurant Hygiene," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 237-267, February.
    13. Stanworth, John & Curran, James, 1999. "Colas, burgers, shakes, and shirkers: Towards a sociological model of franchising in the market economy," Journal of Business Venturing, Elsevier, vol. 14(4), pages 323-344, July.
    14. Francine Lafontaine (ed.), 2005. "Franchise Contracting and Organization," Books, Edward Elgar Publishing, number 3146.
    15. Geraldina Polanco & Sarah Zell, 2017. "English as a Border-Drawing Matter: Language and the Regulation of Migrant Service Worker Mobility in International Labor Markets," Journal of International Migration and Integration, Springer, vol. 18(1), pages 267-289, February.
    16. Steven Michael, 2014. "Can franchising be an economic development strategy? An empirical investigation," Small Business Economics, Springer, vol. 42(3), pages 611-620, March.
    17. Wayne Lewchuk, 2017. "Precarious jobs: Where are they, and how do they affect well-being?," The Economic and Labour Relations Review, , vol. 28(3), pages 402-419, September.
    18. L'industria, 2020. "Call for papers," L'industria, Società editrice il Mulino, issue 2, pages 367-370.
    19. Rebecca Casey & Eric Tucker & Leah F Vosko & Andrea M Noack, 2018. "Using tickets in employment standards inspections: Deterrence as effective enforcement in Ontario, Canada?," The Economic and Labour Relations Review, , vol. 29(2), pages 228-249, June.
    20. Utgård, Jakob & Nygaard, Arne & Dahlstrom, Robert, 2015. "Franchising, local market characteristics and alcohol sales to minors," Journal of Business Research, Elsevier, vol. 68(10), pages 2117-2124.
    21. Dant, Rajiv P. & Kaufmann, Patrick J., 1999. "Preface to the special issue on franchising," Journal of Business Venturing, Elsevier, vol. 14(1), pages 1-3, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rostami-Tabar, Bahman & Ali, Mohammad M. & Hong, Tao & Hyndman, Rob J. & Porter, Michael D. & Syntetos, Aris, 2022. "Forecasting for social good," International Journal of Forecasting, Elsevier, vol. 38(3), pages 1245-1257.
    2. Basso, Gaetano & Boeri, Tito & Caiumi, Alessandro & Paccagnella, Marco, 2020. "The New Hazardous Jobs and Worker Reallocation," IZA Discussion Papers 13532, Institute of Labor Economics (IZA).
    3. Jauernig, Johanna & Uhl, Matthias & Valentinov, Vladislav, 2021. "The ethics of corporate hypocrisy: An experimental approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 131.
    4. Reijo Savolainen & Leslie Thomson, 2022. "Assessing the theoretical potential of an expanded model for everyday information practices," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 73(4), pages 511-527, April.
    5. James G. Combs & David J. Ketchen Jr & Jeremy C. Short, 2011. "Franchising Research: Major Milestones, New Directions, and its Future within Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 35(3), pages 413-425, May.
    6. Michaelis, Timothy L. & Scheaf, David J. & Carr, Jon C. & Pollack, Jeffrey M., 2022. "An agentic perspective of resourcefulness: Self-reliant and joint resourcefulness behaviors within the entrepreneurship process," Journal of Business Venturing, Elsevier, vol. 37(1).
    7. Czajkowski, Mikołaj & Bylicki, Michał & Budziński, Wiktor & Buczyński, Mateusz, 2022. "Valuing externalities of outdoor advertising in an urban setting – the case of Warsaw," Journal of Urban Economics, Elsevier, vol. 130(C).
    8. Lee Yong-Shik, 2020. "Law and Development: Three Irreconcilable Interests – Call for a New Beginning," The Law and Development Review, De Gruyter, vol. 13(1), pages 321-333, January.
    9. Michael McAleer, 2021. "A Critique of Recent Medical Research in JAMA on COVID-19," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(1), pages 40-142, March.
    10. Isabel-María García-Sánchez & Lázaro Rodríguez-Ariza & María-del-Carmen Granada-Abarzuza, 2021. "The Influence of Female Directors and Institutional Pressures on Corporate Social Responsibility in Family Firms in Latin America," JRFM, MDPI, vol. 14(1), pages 1-20, January.
    11. Aram TERZYAN, 2020. "Change or continuity? Exploring post-revolution state - building in Ukraine and Armenia," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 12(1), pages 20-41, May.
    12. Michael McAleer, 2021. "A Critique of Recent Medical Research in JAMA on COVID-19," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(1), pages 40-142, March.
    13. Cristiano, S. & Ulgiati, S. & Gonella, F., 2021. "Systemic sustainability and resilience assessment of health systems, addressing global societal priorities: Learnings from a top nonprofit hospital in a bioclimatic building in Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    14. Benedikt Fecher & Gert G. Wagner, 2016. "Open Access, Innovation, and Research Infrastructure," Publications, MDPI, vol. 4(2), pages 1-8, June.
    15. Charpin, Remi & Lee, Min Kyung & Wu, Ting, 2021. "Mobile procurement platforms: Bridging the online and offline worlds in China's restaurant industry," International Journal of Production Economics, Elsevier, vol. 241(C).
    16. Heckelei, Thomas & Huettel, Silke & Odening, Martin & Rommel, Jens, 2021. "The replicability crisis and the p-value debate – what are the consequences for the agricultural and food economics community?," Discussion Papers 316369, University of Bonn, Institute for Food and Resource Economics.
    17. Graeme Auld & Steven Bernstein & Benjamin Cashore & Kelly Levin, 2021. "Managing pandemics as super wicked problems: lessons from, and for, COVID-19 and the climate crisis," Policy Sciences, Springer;Society of Policy Sciences, vol. 54(4), pages 707-728, December.
    18. Vasja Vehovar & Zdenek Smutny & Alice R. Robbin, 2021. "What is Social Informatics from an International Perspective?," Acta Informatica Pragensia, Prague University of Economics and Business, vol. 2021(3), pages 207-210.
    19. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, Institute of Labor Economics (IZA).
    20. Stephan Kampelmann & Emmanuel Raufflet & Giulia Scialpi, 2020. "Earth, wood, and coffee: empirical evidence on value creation in the circular economy," ULB Institutional Repository 2013/308601, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Canada; compliance; employment standards; enforcement; franchising; industry; labour standards; legal violations; Ontario;
    All these keywords.

    JEL classification:

    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • J89 - Labor and Demographic Economics - - Labor Standards - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecolab:v:32:y:2021:i:1:p:39-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.