Franchise Contract Regulations and Local Market Structure

Charles Murry and Peter Newberry

No 991, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Many U.S. states have regulations in place that restrict the ability of franchisors to terminate franchise contracts. We estimate the economic effects of these regulations, with a focus on how they impact market structure. Using data from the quick-service restaurant industry, we find that implementing the franchise regulation results in 4-5% fewer establishments in the average county. Our results imply franchise regulation leads to increased concentration in a large number of markets, as the number of counties in the bottom quartile of concentration would increase by between 11% and 15% with regulation.

Keywords: Franchising; Entry; Regulatory Capture; Retailing (search for similar items in EconPapers)
JEL-codes: K20 L22 L26 (search for similar items in EconPapers)
Date: 2020-01-08, Revised 2021-03-19
New Economics Papers: this item is included in nep-cta, nep-law and nep-reg
Note: previously circulated as "Local Effects of Franchise Contract Regulations"
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Journal Article: Franchise Contract Regulations and Local Market Structure (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:991

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