Franchising offers a means of reconciling the coordination and control benefits of vertical integration with the entrepreneurial flexibility and high-powered incentives of market contracts.

Question

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Franchising allows the franchisor to maintain control over the operations of the franchisee while also providing incentives for the franchisee to operate successfully. This creates a balance between coordination and flexibility, making franchising an effective business model.

Franchising Offers a Means of Reconciling the Coordination and Control