The Pros And Cons Of Franchising

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Franchising is a common term in daily life, business discourse, and the law. Nevertheless, the term is used in different contexts and with different meanings. Coughlan, Anderson, Stern, and El-Ansary employ the European Union’s description of franchising as a “…package of industrial or intellectual property rights.” The EU identifies three features of franchising—a common name or sign, with a uniform presentation of the premises, communication of know-how from franchisor to franchisee, and continuing provision of commercial or technical services by the franchisor to the franchisee. Coughlan, et. al. point out that the EU description may be too restrictive [1, p.52]. Franchising has been associated with a variety of institutional arrangements.…show more content…
Hayek addressed the role of the information content of prices (broadly defined) in the mid-20th century debate with Keynes and other advocates of central planning regarding the role of markets versus centralized planning in coordinating economic life—in answering the basic economic questions posed above. Some critics of market coordination stressed the lack of realism in the perfect competition model and concluded that the resultant market failure rendered central planning a superior way to direct an aggregate economy as opposed to the decentralized direction implied by the invisible hand. Hayek did not deny the absence of perfect information in actual markets. Instead, Hayek compared the quality of information in an admittedly imperfect, decentralized price system with the quality of information in decisions rendered by a centralized planner. Hayek asserted that the imperfect information dispersed among decentralized decision makers in a price mechanism led to superior outcomes than those based on aggregations of data employed by central planners who used summary data to direct the basic economic decisions of decentralized decision

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