chains in the metropolitan Pittsburgh and Detroit areas, that there is price dispersion in fast-food franchising. I then show … that the amount of price dispersion relates to the amount of franchising in a way that suggests that 1) franchisors are not … in corporate restaurants. This suggests that the reason behind the price differentials is not franchisor opportunism, but …

The organizational form of franchising has been shown to yield higher profits and faster growth through reducing agency … reduce overall system quality, and that this problem is inherent in the nature of franchising. The theory is tested by … their units. In both industries, quality is negatively related to the percent franchising in the chain, controlling for size …