Vertical Restraints and Labor Markets in Franchised Industries

Brian Callaci, Sergio Pinto, Marshall Steinbaum and Matt Walsh

A chapter in Big Data Applications in Labor Economics, Part B, 2024, vol. 52B, pp 255-301 from Emerald Group Publishing Limited

Abstract: This article combines 530 digitized Franchise Disclosure Documents and standard contracts with employer-identified job ads from Burning Glass Technologies to establish stylized facts about franchising labor markets and their relation to the vertical restraints and contractual provisions that limit the autonomy of franchisees vis a vis their franchisors. We report novel findings about the application of vertical restraints like Resale Price Maintenance, Exclusive Dealing, and No-poaching Restrictions, among many others, to a low wage workforce. A legal regime that favors the franchising business model incentivizes franchisees to profit at the expense of workers and to limit egalitarian tendencies operating in the workplace.

Keywords: Vertical restraints; franchising; monopsony; market power; antitrust (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rleczz:s0147-91212024000052b033

DOI: 10.1108/S0147-91212024000052B033

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