The real price of intellectual property: evaluation of franchisees’ benefits

Ivan Kotliarov ()
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Ivan Kotliarov: National Research University, Higher School of Economics, 55 ulitsa Sedova, St. Petersburg 193171, Russia

Acta Oeconomica, 2013, vol. 63, issue 1, 43-60

Abstract: It is demonstrated that models of royalty rate calculations developed for licensing should not be applied to franchising because the benefits received by a licensee and a franchisee are different. It is proposed that the risk reduction generated by the franchisor’s effective technologies and the managerial support given to a franchisee also be included in the model of royalty calculation. It is demonstrated that a franchisee may wish to acquire the franchise even if the franchisor takes the full amount of additional income or if this additional income is negative.

Keywords: royalty; royalty rate; franchising; franchisee; franchisor; risk; income (search for similar items in EconPapers)
JEL-codes: C51 L11 L24 (search for similar items in EconPapers)
Date: 2013
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