Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185132 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11672
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper 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. Based on an analysis of 2016 Franchise Disclosure Documents, we find that "no-poaching 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 no-poaching agreements for models of oligopsony are also discussed. No-poaching agreements are more common for franchises in low-wage and high-turnover industries.
Subjects: 
collusion
no-poaching agreement
monopsony
oligopsony
franchise
JEL: 
J42
J41
J63
Document Type: 
Working Paper

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