000			02913cam a22003257 4500
001			w5247
003			NBER
005			20211020114229.0
006			m o d
007			cr cnu||||||||
008			210910s1995 mau fo 000 0 eng d
100	1		_aLafontaine, Francine. _914757
245	1	0	_aPricing Decisions in Franchised Chains: _bA Look at the Restaurant and Fast-Food Industry / _cFrancine Lafontaine.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c1995.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w5247
500			_aSeptember 1995.
520	3		_aThis paper examines empirical issues of pricing and price dispersion within franchised restaurant and fast-food chains. Given the per se illegality of resale price maintenance (RPM) under current U.S. Antitrust laws, and the fact that franchised outlets are independent businesses under the law, franchisors must delegate the power to set prices to franchisees whereas corporate chains can control downstream prices directly. The issue I examine is whether it matters empirically who, between the franchisor or the franchisee, gets to choose downstream prices, and why. After discussing a number of reasons why prices chosen by franchisees may differ from those that a franchisor would pick, I show, using data from all restaurant 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 able to control franchisees' prices indirectly to the same extent that they control company-owned unit prices and 2) the prices in franchised and corporate units are systematically different. Finally, I show that prices are systematically lower in corporate restaurants. This suggests that the reason behind the price differentials is not franchisor opportunism, but more likely double marginalization or, potentially, the existence of positive horizontal externalities among restaurants in a chain.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aL22 - Firm Organization and Market Structure _2Journal of Economic Literature class.
690		7	_aL42 - Vertical Restraints • Resale Price Maintenance • Quantity Discounts _2Journal of Economic Literature class.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w5247.
856	4	0	_uhttps://www.nber.org/papers/w5247
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w5247
942			_2ddc _cW-PAPER
999			_c343105 _d301667