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Hub and Switches

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Submitted By niceone
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ECON 460 November 19, 2011

Abstract The following paper is an example of the appropriate stlyle, layout and format for an term paper or essay in an economics course. All papers should have a title page that contains the following: 1. Title of the Paper 2. Course Number and Instructor 3. Your name and student number 4. Date Any graphs should be on seperate pages that are not counted as part of the written page requirements. All graphs must be discussed and explained within the body of the text. Newspaper and magazine articles may be cited but do not count as part of the required references.

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A REVIEW OF FRANCHISE THEORY

INTRODUCTION In service based industries one of the fastest growing forms of market structure is that of franchise agreements. Certain aspects of franchise contracts tend to be idiosyncratic in nature thereby attracting a great deal of interest by academics and business analysts in recent years. Various explanations have been proposed for the widespread use of franchise contracts in certain industries. While a great deal of the franchise contract has been explained in the literature, there remains certain aspects of this form of arrangement that has yet to be addressed. This paper intends to address two of these issues as well as proposing an alternative modelling approach to franchise contracts. The second section of this paper describes the basic structure of franchise contracts. The third section discusses the various explanations that have been proposed to explain franchising. The fourth section sets two aspects of the franchise contract that has not been addressed in the literature. The …rst of these is existence of both corporate owned outlets and franchised outlets within the same organization. Some authors have predicted that one form or the other would come to dominate the organization. Others have

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