Moral hazard, path dependency, and failing franchisors: mitigating franchisee risk through participation

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dc.contributor.authorGant, Jennifer L. L.
dc.contributor.authorBuchan, Jenny
dc.date.accessioned2019-05-14T09:27:45Z
dc.date.available2019-05-14T09:27:45Z
dc.date.issued2019-04-01
dc.date.updated2019-05-14T09:14:27Z
dc.description.abstractEmployment relations are well understood. Business format franchising is a newer and rapidly evolving business expansion formula, also providing employment. This article compares the fates of employees and franchisees in their employer/franchisor insolvency. Whereas employees enjoy protection, franchisees continue to operate in conditions that have been described as Feudal. We identify the inherence of moral hazard, path dependency and optimism bias as reasons for the failure of policies and corporations laws, globally, to adapt to the franchise relationship. This failure comes into sharp focus during a franchisor’s insolvency. We demonstrate that the models of participation available to employees in the United States, Australia and the United Kingdom could be used to inform a re-balancing of the franchisees’ relationship with administrators and liquidators during the insolvency of their franchisor, providing franchisees with rights and restoring their dignity.en
dc.description.statusPeer revieweden
dc.description.versionAccepted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.citationGant, J. L. L. and Buchan, J. 'Moral Hazard, Path Dependency and Failing Franchisors: Mitigating Franchisee Risk Through Participation', (2019) Federal Law Review, In Press, doi: 10.1177/0067205X19831841en
dc.identifier.doi10.1177/0067205X19831841en
dc.identifier.eissn14446928
dc.identifier.endpage33en
dc.identifier.issn0067205X
dc.identifier.issued2en
dc.identifier.journaltitleFederal Law Reviewen
dc.identifier.startpage1en
dc.identifier.urihttps://hdl.handle.net/10468/7898
dc.identifier.volume47en
dc.language.isoenen
dc.publisherSage Publicationsen
dc.relation.urihttps://journals.sagepub.com/doi/abs/10.1177/0067205X19831841
dc.rights© The Author(s) 2019. Published by Sage in Association with The Australian National University. Reprinted by permission of SAGE Publications.en
dc.subjectFranchisingen
dc.subjectFranchiseen
dc.subjectAgency theoryen
dc.subjectInsolvencyen
dc.titleMoral hazard, path dependency, and failing franchisors: mitigating franchisee risk through participationen
dc.typeArticle (peer-reviewed)en
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