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SUNY at Binghamton Principals and Franchise as Agents Discussion

 

as per agency
theory, you may consider companies like Subway and Econolodge as principals, and franchisees
as agents. Given this arrangement, why is conflict being experienced in the principal-agent
relationship? Is the conflict related to adverse selection or moral hazard? How can this conflict
be resolved? Instead of answering the above questions separately, please combine your answers
to the questions above into one essay.