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Market Power in Franchise Cases in the Wake of Kodak: Applying Post-Contract Hold Up Analysis to Vertical Relationships

The key economic issue in analyzing franchisor market power is determining at what point market power should be measured. Should franchisor market power be measured before franchisees have signed their franchise contracts, when many alternative franchisors are competing for the potential franchisee's business? Or should franchisor market power be measured after the franchisee has signed a franchise contract, when franchisee choice may be substantially limited by a requirement that inputs be purchased from the franchisor or from a designated franchisor-approved supplier?