Theory and Evidence on Employer Collusion in the Franchise Sector

  title={Theory and Evidence on Employer Collusion in the Franchise Sector},
  author={Alan B. Krueger and Orley Ashenfelter},
  journal={The Journal of Human Resources},
  pages={S324 - S348}
Abstract In this work we study the role of covenants in franchise contracts that restrict the recruitment and hiring of employees from other units within the same franchise chain in suppressing competition for workers. On the basis of an analysis of 2016 Franchise Disclosure Documents, we find that “nopoaching of workers” agreements are included in a surprising 58 percent of major franchisors’ contracts, including McDonald’s, Burger King, Jiffy Lube, and H & R Block. The implications of these… 

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