Franchising, which is common in many advanced economies, is a contractual form of vertical integration. This article examines the economic rationale for choosing franchising over vertical integration. It also examines the influence of the franchisor's ability to maximize its own profit.
The New Palgrave Dictionary of Economics. (2020). The New Palgrave Dictionary of Economics. Palgrave Macmillan UK. https://doi.org/10.1057/978-1-349-95121-5