Voluntry earnings disclosures in Uniform franchise offering circulars

摘要: Abstract When a franchisor offers to sell new franchises, disclosures relevant the earnings of franchise units are optional. I find that 26% percent franchisors who volunteer earnings-related information tend impose greater investment risk on franchisees in form (1) higher contractual payments and (2) product demand uncertainty. also observe larger systems, which collect data from more locations therefore have precise proprietary information, less likely disclose. This finding is contrary what has been observed securities market, where large firms associated with voluntary disclosure.