Job Market Paper:
The Effect of Franchising on Firms and Consumers
A 2007 corporate acquisition resulted in the sale of all company-owned stores affiliated with a casual dining chain to franchisees. I exploit this change in franchise status to estimate the effects of franchising. I use a utility-based choice model to predict alcohol sales for all liquor-selling bars and restaurants in Texas over a 10-year period. Using this model, I find that franchising a restaurant increases its revenues by 7 percent and produces a consumer utility gain comparable to a 2.8-mile reduction in distance from the individual’s home to the store.
Research Interests:
Industrial Organization; Applied Microeconomics
Jeff Ackermann 