Franchisee Associations as Sources of Bargaining Power? Some Evidence

Nicholas Argyres, Janet Bercovitz

Research output: Contribution to journalArticlepeer-review

Abstract

The empirical literature in economics and strategy on contract structure, including on franchise contract structure, has been largely based on agency and transaction cost theories. The effects of bargaining power have been much less studied. This paper considers the role of independent franchisee associations in franchising relationships as a means to test for the presence of bargaining power effects. We find that the presence or absence of a franchisee association is significantly related to each of three key contractual and relationship characteristics: contract duration, noncompete stringency, and terminations/nonrenewals. This suggests that bargaining power should be accounted for in studies of contract structure and relationship outcomes.

Original languageEnglish (US)
Pages (from-to)811-832
Number of pages22
JournalJournal of Economics and Management Strategy
Volume24
Issue number4
DOIs
StatePublished - Dec 1 2015

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

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