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Franchising DreamsThe Lure of Entrepreneurship in America$
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Peter M. Birkeland

Print publication date: 2002

Print ISBN-13: 9780226051901

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226051925.001.0001

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(p.157) Chapter 9Control
Franchising Dreams

Peter M. Birkeland

University of Chicago Press

This chapter discusses how to control people who are geographically distant from corporate headquarters and thus cannot be supervised on-site. Monitoring franchisees by being in the shop and requiring income statement are efficient tools for controlling the system. Additionally, the monetary incentive is another type of control mechanism. Moreover, subtle interactions between franchisors and franchisees can control the franchisee units. Incentives, threats, training systems, and trust were all under the impact of franchisors, and they were elements that franchisors directly managed. Trademarks help the franchisor control the delivery and scope of services franchisees provide. Franchisees enter a system governed by a long-term, ironclad contract in the franchisor's favor, operate on the periphery of the economy providing services that are largely generic and subject to price competition, and shroud themselves under a trademark that makes their unit a perfect substitute.

Keywords:   control, franchisees, income statement, monetary incentive, interactions, threats, training systems, trust, trademarks, franchisor

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