Bridge over ocean
1 March 2000 Financial Analysts Journal Volume 56, Issue 2

Franchise Labor

  1. Martin L. Leibowitz, PhD

In today's global environment, with the increasing emphasis on knowledge-based resources and information dissemination through high-tech channels, key employees play a crucial role in a company's profitability. Such key employees can represent an important component of a company's overall business franchise. At the same time, competitive compensation policies have begun to treat (explicitly and/or implicitly) these “franchise labor” employees as a special class of super-shareholders. The claims on profits put forward by this cadre of franchise labor can have a major impact on firm valuation.

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