The Economics of Franchising

Roger D. Blair is Huber Hurst Professor in the Department of Economics at the University of Florida where he has served on the faculty since 1970. He teaches courses in antitrust economics, law and economics, and the economics of sports. Professor Blair has published 165 articles and chapters in books, primarily in economics journals and law reviews. He has served as an antitrust consultant to the US Department of Justice, the Federal Trade Commission, the Attorneys General of California, Arizona, Missouri, Oregon, Washington and Florida, and numerous corporations. The books he has coauthored include Antitrust Economics, Law and Economics of Vertical Integration and Control, Monopsony: Antitrust Law and Economics, and forthcoming from Cambridge University Press Intellectual Property: Economics and Legal Dimensions of Rights and Remedies with Thomas F. Cotter. Francine Lafontaine is Professor of Business Economics and Public Policy and Professor of Economics at the University of Michigan Business School where she has taught since 1991. Professor Lafontaine mostly teaches applied microeconomics to MBAs, along with elective courses on firm strategy and antitrust and on the economics of franchising. She has published numerous scholarly articles on franchising in top journals in her field, including the Journal of Political Economy, the RAND Journal of Economics, the Journal of Law and Economics, the Journal of Law, Economics and Organization and the Journal of Industrial Economics, as well as in marketing and entrepreneurship journals. Professor Lafontaine is widely recognized as a world expert on the subject of franchising and as such has acted as consultant and expert witness for various companies.

'This superb book will become the standard reference for understanding the economics of franchising. Extending their previous research, these outstanding scholars assemble new data sets to establish basic facts and explode several pervasive myths about franchising. How fast is the already significant amount of franchising growing? Are franchisees more likely to succeed than independent businesses? What are the typical terms of a franchisee's contract and why? The authors answer these and other fascinating questions with a keen economic intuition and with precision. The book is a must reading for students of industrial organization and contracting.' Dennis W. Carlton, University of Chicago

• Preface; 1. Introduction; 2. Four popular misconceptions about franchising; 3. Franchise contracts; 4. Franchising, vertical integration, and vertical restraints; 5. Quality control; 6. Franchise tying contracts; 7. Vertical price controls in franchising; 8. Encroachment; 9. Advertising and promotion; 10. Termination and non-renewal; 11. Concluding remarks.