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Determinants of contractual restraints in franchise contracting
Author(s) -
Hajdini Ilir,
Raha Aveed
Publication year - 2018
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2961
Subject(s) - tying , transaction cost , franchise , business , safeguarding , german , database transaction , industrial organization , bundle , corporate governance , vertical restraints , alienation , punitive damages , microeconomics , marketing , economics , incentive , finance , computer science , law , medicine , materials science , nursing , archaeology , political science , programming language , composite material , history
Although an efficient design of franchise contracts requires from the franchisor to choose a bundle of contractual restraints as safeguarding and control mechanism, previous research has not explored the antecedents of contractual restraints as a bundle of contractual clauses. To address this gap, the aim of this study is to explain the determinants of the most important contractual restraints (i.e., exclusive dealing, exclusive territory, tying, resale price maintenance, call option, leasing, alienation, and noncompetition clauses), using transaction cost and relational governance reasoning. The regression results based on primary data from German and Swiss franchise systems provide support of hypotheses.