Franchised Monopoly

DEFINITION of 'Franchised Monopoly'

Monopoly status given by the government to a company. A franchised monopoly is sheltered from competition by virtue of an exclusive license or patent granted to it by the government. Franchised monopolies are legal.

BREAKING DOWN 'Franchised Monopoly'

In most nations, franchised monopolies can be found in essential sectors such as transportation, water supply and power. In many countries, primarily developing nations, natural resources such as oil and gas, and metals and minerals are also controlled by government-sanctioned monopolies. While one argument in favor of franchised monopolies is that they ensure that control over essential industries remains in the hands of the public, opponents of such monopolies claim that they promote favoritism and introduce market distortions.

RELATED TERMS
  1. Natural Monopoly

    A type of monopoly that exists as a result of the high fixed ...
  2. Monopoly

    A situation in which a single company or group owns all or nearly ...
  3. Legal Monopoly

    A company that is operating as a monopoly under a government ...
  4. Rate Of Return Regulation

    A form of price setting regulation where governments determine ...
  5. Monopolist

    A person, group or organization with a monopoly. In other words, ...
  6. Franchise

    A type of license that a party (franchisee) acquires to allow ...
Related Articles
  1. Markets

    How & Why Companies Become Monopolies

    Without competition, monopolies can raise prices and lower quality leaving consumers little choice. But monopolies can benefit consumers as well.
  2. Markets

    A History Of U.S. Monopolies

    These monoliths helped develop the economy and infrastructure at the expense of competition.
  3. Markets

    How a Monopoly Works

    In economics, a monopoly occurs when one company is the sole (or nearly sole) provider of a good or service within an industry. This potentially allows that company to become powerful enough ...
  4. Markets

    A History Of U.S. Monopolies

    Here are a few of the most notorious monopolies in U.S. history.
  5. Markets

    New Monopoly Edition Ditches Paper Money (HAS)

    Hasbro's latest version of Monopoly speeds up the classic game and reflects our movement towards a cashless society. It will still probably end friendships over the "free parking" rule, though.
  6. Markets

    Early Monopolies: Conquest And Corruption

    This structure can be very effective, but it is also known for its abuse of power.
  7. Markets

    Diamond in the Rough? U.S. Franchises in 2016 (MCD, DNKN)

    Learn about U.S. franchise growth and direction for 2016 and how changes in wage standards and consumer preferences may endanger large fast food chains.
  8. Managing Wealth

    5 Lessons Monopoly Teaches Us About Finance And Investing

    The game of Monopoly can increase your chances of having a better and useful understanding of prudent financial and investment principles.
  9. Personal Finance

    Why Monopoly Is A Terrible Finance Teacher

    With its plethora of inaccuracies, Monopoly doesn't offer the best lessons in real-world finance.
  10. Entrepreneurship & Small Business

    When Is A Franchise The Right Investment For You?

    Do you have the right mix of credit, capital and business savvy to make you an ideal candidate for buying a franchise?
RELATED FAQS
  1. Are monopolies always bad?

    Learn why governments sanction some monopolies, such as monopolies over public utilities, and why these monopolies are good ... Read Answer >>
  2. What is a monopoly?

    Monopoly is a fun family game, but in real life, a monopoly can be dangerous to a country's economy. A monopoly occurs when ... Read Answer >>
  3. What are common examples of monopolistic markets?

    Discover what causes real instances of market monopoly, how it persists and where monopoly privilege is most common in the ... Read Answer >>
  4. How does a monopoly contribute to market failure?

    Read a simple overview of the theory of market monopoly, where it originated and some contemporary challenges to the classical ... Read Answer >>
  5. Are there any legal monopolies in America or Europe?

    Legal monopolies continue to exist in the United States and Europe despite the current trend against their recognition and ... Read Answer >>
  6. What are the characteristics of a monopolistic market?

    Learn about monopolistic markets and specific descriptions of the main characteristics that distinguish a monopolistic market ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center