When Dairy Queen entered the Canadian market in 1953 the company sold license agreements to individuals that covered a specific geographic area. The franchisee (the individual who purchased the franchise from Dairy Queen), was given exclusive rights to open Dairy Queen locations in that area. The company could not sell new franchises within that area. As the company sought to grow sales it could not increase market penetration because the franchisee alone could decide to add locations in that territory. Many of the franchisees were satisfied with just one location in a territory that could easily have supported three or more locations (compare this with Tim Hortons who only offer franchises for a specific location and not a territory). Because Dairy Queen wanted to grow the number of locations and the franchisees were satisfied with one in their area, _ _ resulted.

Question

Quizplus · Accepted Answer

Vertical conflict resulted because the conflict was between different levels of the same channel, i.e., Dairy Queen (franchisor) and its franchisees.

When Dairy Queen Entered the Canadian Market in 1953 the Company