Growing a Franchise System: Structure and Strategy

The link between structure and strategy decisions is recognized and examined here, using a dynamic, game-theoretic model that addresses the following inter-related decisions faced by a profit-maximizing franchisor: (i) optimal pattern of growth over time, in terms of the proportion of retail outlets owned and operated by franchisees; (ii) optimal franchise contract (the fixed franchise fee and the royalty) offered to franchisees; (iii) optimal …