VOLUME XIII
AUTUMN 2005

COMPENSATIONS IN FRANCHISING
 
LUIS VÁZQUEZ
Universidad de Salamanca
 
This article provides evidence on the determinants of the ongoing variable payments transferred by franchisees to franchisors. The results support the double-sided moral hazard explanation for franchise contracts.
 
Key words: franchising, initial franchise fee, royalty rates, agency theory.
JEL classification: L14, L22, L81.

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