Innovation and Authority in Franchise Systems: An Empirical Exploration of the Plural Form

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Innovation and Authority in Franchise Systems: An Empirical Exploration of the Plural Form

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Lewin-Solomons, S.

Abstract

The co-existence of franchised and company-owned stores influences the dynamic of innovation in franchise systems as well as the balance of power between franchisees and their chain. We report on case studies of five franchise system. We focus on how innovation and authority are interrelated in franchise systems, and we illustrate how a synergism exists between the franchised and company-owned sectors. We relate these finding to a theoretical model which predicts that franchisees will have moderate power when there are many company stores, and either very low or very high power when there are few company stores.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0015.

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Date of creation: Nov 2000
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Handle: RePEc:cam:camdae:0015

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Find related papers by JEL classification:
L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
L8 - Industrial Organization - - Industry Studies: Services
M0 - Business Administration and Business Economics; Marketing; Accounting - - General

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Mathewson, G Frank & Winter, Ralph A, 1985. "The Economics of Franchise Contracts," Journal of Law & Economics, University of Chicago Press, vol. 28(3), pages 503-26, October.
Brickley, James A & Dark, Frederick H & Weisbach, Michael S, 1991. "The Economic Effects of Franchise Termination Laws," Journal of Law & Economics, University of Chicago Press, vol. 34(1), pages 101-32, April.
Other versions:
- Brickley, J.A. & Dark, F.H. & Weisbach, M.S., 1988. "The Economic Effects Of Franchise Termination Laws," Papers 88-11, Rochester, Business - Managerial Economics Research Center.
Lafontaine, Francine & Slade, Margaret E, 1997. "Retail Contracting: Theory and Practice," Journal of Industrial Economics, Blackwell Publishing, vol. 45(1), pages 1-25, March. [Downloadable!] (restricted)
Other versions:
- Lafontaine, F. & Slade, M., 1996. "Retail Contracting: Theory and Practice," G.R.E.Q.A.M. 96b09, Universite Aix-Marseille III.
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Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
Other versions:
- Aghion, Philippe & Tirole, Jean, 1994. "Formal and Real Authority in Organizations," IDEI Working Papers 37, Institut d'Économie Industrielle (IDEI), Toulouse.
- Philippe Aghion & Jean Tirole, 1994. "Formal and Real Authority in Organizations," Working papers 95-8, Massachusetts Institute of Technology (MIT), Department of Economics.
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Gallini, Nancy T & Lutz, Nancy A, 1992. "Dual Distribution and Royalty Fees in Franchising," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(3), pages 471-501, October.
Katz, Barbara G. & Joel Owen, 1992. "On the existence of franchise contracts and some of their implications," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 567-593, December. [Downloadable!] (restricted)
Lafontaine, Francine & Slade, Margaret E., 1996. "Retail contracting and costly monitoring: Theory and evidence," European Economic Review, Elsevier, vol. 40(3-5), pages 923-932, April. [Downloadable!] (restricted)
Other versions:
- Lafontaine, F. & Slade, M.E., 1995. "Retail Contracting and Costly Monitoring: Theory and Evidence," UBC Departmental Archives 95-33, UBC Department of Economics.
Howard Beales, J. III & Muris, Timothy J., 1995. "The foundations of franchise regulation: Issues and evidence," Journal of Corporate Finance, Elsevier, vol. 2(1-2), pages 157-197, October. [Downloadable!] (restricted)

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Sebastian Kranz & Shira B. Lewin-Solomons, 2008. "Decision Structures in Franchise Systems of the Plural Form," Bonn Econ Discussion Papers bgse8_2008, University of Bonn, Germany. [Downloadable!]

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