Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
886591 | Journal of Retailing | 2009 | 5 Pages |
Abstract
Conflict is created when business format franchisors penetrate existing markets with new outlets that increase system-wide sales, but negatively affect the sales and profits of existing franchisees. Territorial exclusivity contracts are used to manage channel conflict in such situations. We present a model to value territorial exclusivity from the perspective of both the franchisor and the franchisee. We show that under certain circumstances there is positive value to the franchisor by including the exclusivity clause in the contract and to the franchisee by purchasing this exclusivity. When this happens, the likelihood of franchisor–franchisee encroachment-related conflict is reduced.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Marketing
Authors
Suresh K. Nair, Surinder Tikoo, Shuguang Liu,