The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Economics of Franchises

  • Roger D. Blair
  • Jessica S. Haynes
Reference work entry


Franchising, which is common in many advanced economies, is a contractual form of vertical integration. This article examines the economic rationale for choosing franchising over vertical integration. It also examines the influence of the franchisor’s ability to maximize its own profit.


Distribution systems Franchisee Franchising Franchisor Royalties Vertical integration 

JEL Classifications

L14 L24 M55 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Roger D. Blair
    • 1
  • Jessica S. Haynes
    • 1
  1. 1.