Abstract
This artice presents new decision models for franchising, and optimal conditions for franchising. Franchising has become a major business model (particularly in the retailing industry) and the decision to franchise, and the associated franchising terms can have significant impact on company growth and survival. The article is mainly theoretical and relies on empirical work in other articles; and the modelling methodology used in the article is new in the franchising literature. Franchising accounts for a substantial and growing portion of the US retailing industry. Franchised business in the US generate about $1 trillion of sales each year; one in twelve US retail establishments is a franchised business; and sales from franchisees account for 40% of total annual US retail Sales.
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