The franchise system attempts to limit the entry of new firms into an existing industry.

Question

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The franchise system involves an agreement between a franchisor and a franchisee, where the franchisor grants the franchisee the right to use its brand, products, and business model. This system allows the franchisor to expand its reach and market share without having to invest in new locations and infrastructure. However, it also limits the entry of new firms into the industry, as potential competitors would need to obtain a franchise agreement from the franchisor in order to operate under the same brand and business model.

The Franchise System Attempts to Limit the Entry of New