Customer Reviews

The Economics of Franchising

5 star:		(1)
4 star:		(1)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

The U.S. Government quit collecting data on franchising in 1986. The franchise industry has, for the most part, done a poor job of collecting good data. Blair and Lafontaine collect the data, such as it is, which has been reliably produced on franchising since 1986 and reveal four prevalent myths in franchising. Data are available for all franchisors and are also segmented among industries.

This book will be helpful for the person in a new franchisor operation responsible for creating the economic model, i.e., the initial franchise fee, royalty fees and advertising fees. The book won't be much help without a background of college-level introductory macro- and microeconomics. A basic knowledge of calculus will enable you to follow the analyses but isn't critical to understanding the conclusions. The book also critically analyzes the economic issues which impact franchisor-franchisee tensions.

After digging around a lot, I've found that this is the only good academic treatment of the economics of franchising. It is very well written and is of adequate complexity to interest economists while also being simple enough for anybody to understand. It is both a positive and a normative study. The authors have some of the most comprehensive data available about what franchises do, as well as interesting conversation about what they should do. I have the utmost respect for the authors, and I recommend this book to anybody who has an interest in the topic.