Open Access
Ownership, agency and wages: an examination of franchising in the fast food industry.
Alan B. Krueger
- Iss: 3334
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TLDR
In this paper, the difference in compensation between company-owned and franchisee-owned fast food restaurants is estimated based on two data sets, and it is found that employee compensation is slightly greater at company-own outlets than at franchise-owned outlets.Abstract:
This paper estimates the difference in compensation between company-owned and franchisee-owned fast food restaurants. The contrast is of interest because contractual arrangements give managers of company-owned outlets less of an incentive to monitor and supervise employees. Estimates based on two data sets suggest that employee compensation is slightly greater at company-owned outlets than at franchisee-owned outlets. The earnings gap is 9 percent for assistant and shift managers and 2 percent for full-time crew workers. Furthermore, the tenure-earnings profile is steeper at company-owned restaurants. These findings suggest that monitoring difficulties influence the timing and generosity of compensation.read more
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Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design
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Agency Theory and Franchising: Some Empirical Results
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Franchising: A Review and Avenues to Greater Theoretical Diversity
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References
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The Employer Size-Wage Effect
Charles Brown,James L. Medoff +1 more
TL;DR: In this article, the authors consider six explanations for the positive relationship between employer size and wages: large employers hire higher quality workers; offer inferior working conditions; make more use of high wages to forestall unionization; have more ability to pay high wages; face smaller pools of applicants relative to vacancies; and are less able to monitor their workers.
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The Theory of the Firm and the Structure of the Franchise Contract
TL;DR: In this article, the authors used the tools of Coase's (1937) theory of the firm, and an analysis of property rights, incentives and monitoring, to assess the nature of the franchise contract.
Journal ArticleDOI
An Empirical Look at Franchising as an Organizational Form
TL;DR: In this paper, the authors identify the reasons for the dominance of franchise arrangements by examining the theoretical literature on franchising and related literatures on the theory of the firm, firm growth, managerial and employee selection, a nd brand-name capital.
Journal ArticleDOI
Incentives, Productivity, and Labor Contracts
Edward P. Lazear,Robert L. Moore +1 more
TL;DR: In this article, the authors examined the relationship between age-earnings profiles and worker incentives by contrasting wage and salary workers with the self-employed, and found that most of the slope in age earnings profiles is accounted for by the desire to provide incentives, rather than by on-the-job training.