Franchisee Associations as Sources of Bargaining Power? Some Evidence. Issue 4 (October 2015)

• Record Type: Journal Article
• Authors: Argyres, Nicholas; Bercovitz, Janet
• Is Part Of: Journal of economics & management strategy. Volume 24:Issue 4(2015)
• Page Start: 811
• Page End: 832
• Publication Date: 2015-10
• Subjects: Economics -- Periodicals; Business -- Periodicals; Management -- Periodicals; Strategic planning -- Periodicals; 330.1
• DOI: 10.1111/jems.12111
• Languages: English
• ISSNs: 1058-6407

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p>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.</p> </abstract>