The owner of the local "Fatty Foods" chain of restaurants is thinking about retiring.He has two options: he can hire salaried managers for his stores or franchise them to local entrepreneurs.If the owner believes that there are high costs to monitoring the stores after he retires,what should he do?

Question

​The owner of the local "Fatty Foods" chain of restaurants is thinking about retiring.He has two options: he can hire salaried managers for his stores or franchise them to local entrepreneurs.If the owner believes that there are high costs to monitoring the stores after he retires,what should he do?

Quizplus · Accepted Answer

By selling off the stores as franchises, the owner can transfer the costs of monitoring to the local entrepreneurs who will be responsible for the day-to-day operations of the stores. This will allow the owner to retire without worrying about the high costs of monitoring the stores. Additionally, the franchisees will have a vested interest in making the stores profitable, which may lead to better performance and increased revenues for the owner if he retains some ownership in the franchises.

​The Owner of the Local "Fatty Foods" Chain of Restaurants

The Owner of the Local "Fatty Foods" Chain of Restaurants