Ownership Rights in Franchising Firms

GEABA - Discussion Paper No. 01-24

30 Pages Posted: 16 May 2002

Date Written: 2001

Abstract

The paper offers an explanation for the structure of ownership rights in franchising networks which emphasize the role of intangible assets. By applying the incomplete contracting theory of the firm we argue that the structure of ownership rights depends on the distribution of intangible assets between the franchisor and the franchisee. The higher the franchisor's (franchisee's) intangible assets relative to the franchisee (franchisor), the more ownership rights should be transferred to him. This hypothesis was tested by using data from the Austrian franchise sector. The empirical results are supportive of the hypothesis.

Keywords: Franchising, Ownership Rights, Intangible Assets, Residual Income

JEL Classification: D89, G32, L22

Suggested Citation

Windsperger, Josef, Ownership Rights in Franchising Firms (2001). GEABA - Discussion Paper No. 01-24, Available at SSRN: https://ssrn.com/abstract=310080 or http://dx.doi.org/10.2139/ssrn.310080

Josef Windsperger (Contact Author)

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, A1090
Austria

HOME PAGE: http://im.univie.ac.at

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