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Local Effects of Franchise Contract Regulations

Charles Murry () and Peter Newberry ()
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Peter Newberry: Penn State University

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

Abstract: Many U.S. states restrict the ability of franchisors to terminate or restructure franchise contracts through regulation. We empirically examine the effect of these regulations on the franchising decisions of firms at the local level. Using data from the quick-service restaurant industry, we find that franchise regulations are associated with 12% fewer franchises in the average zip-code. We find evidence that the impact of the regulation varies based on the local characteristics of a zip-code and can be as high as 16%.

Keywords: Franchising; Entry; Regulatory Capture; Retailing (search for similar items in EconPapers)
JEL-codes: L22 L26 K20 (search for similar items in EconPapers)
Date: 2020-01-08
New Economics Papers: this item is included in nep-cta, nep-law and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:991

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