Quarterly Journal of Economics Vol. 106 No. 1 1991
Ownership, Agency, and Wages: An Examination of Franchising in the Fast Food Industry
Abstract
This paper estimates the difference in compensation between company-owned and franchisee-owned fast food restaurants. The contrast is of interest because contractual arrangements give managers of company-owned outlets less of an incentive to monitor and supervise employees. Estimates based on two data sets suggest that employee compensation is slightly greater at company-owned outlets than at franchisee-owned outlets. The earnings gap is 9 percent for assistant and shift managers and 2 percent for full-time crew workers. Furthermore, the tenure-earnings profile is steeper at company-owned restaurants. These findings suggest that monitoring difficulties influence the timing and generosity of compensation.
- DOI
- 10.2307/2937907
- Volume
- 106
- Issue
- 1
- Pages
- 75-101
- Language
- en
- Sources
- openalex crossref