The aim of this article is to emphasize the major contribution of
franchise, as hybrid institutional arrangement and governance structure, on the
mechanism of sustainable development. Transaction costs illustrate a permanent
obstacle which hinders healthy, long-term development. Using the theoretical tools
of the New Institutional Economics we admit that, placed between the market and
the firm, mixed governance structures are able to limit all these costs. Among them,
franchise is the closest to the optimal model. Considering its profound social and
economic valences franchise might be considered a vector of sustainable
development
