On Franchise Royalty Rates, Franchise Fees and Incentive Effects

  • Michael I. C. Nwogugu


Franchising remains a major business model and international market-entry strategy (particularly in the retailing and hospitality industries), and has substantial effects on company strategy, growth and survival. Franchising accounts for a significant percentage of economic output, employment/payroll-costs and sales revenues in many developed countries (and increasingly, in many developing countries). This chapter: (i) critiques existing theoretical and empirical studies on franchise contracts, franchise royalty fees and incentives; (ii) critiques the use of game theory in franchising studies; (iii) introduces a new franchise incentive system and dynamic franchise fee/royalty system; and (iv) introduces optimal conditions for royalty systems in franchising.


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© The Author(s) 2019

Authors and Affiliations

  • Michael I. C. Nwogugu
    • 1
  1. 1.EnuguNigeria

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