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. Legal Monopoly

    A legal monopoly is a company that is operating as a monopoly ...
  2. Monopoly

    A monopoly refers to a sector or industry dominated by one corporation, ...
  3. Monopolist

    A monopolist is an individual, group or company that controls ...
  4. Franchise

    A franchise is a type of license that a party (franchisee) acquires ...
  5. Bilateral Monopoly

    A market that has only one supplier and one buyer. The one supplier ...
  6. Gorilla

    A company that dominates an industry without having a complete ...
Related Articles
  1. Insights

    How and 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. Investing

    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.
  3. Investing

    5 finance and investing lessons from Monopoly

    The classic real estate game of Monopoly can increase your chances of having a better understanding of prudent financial and investment principles.
  4. Investing

    Early Monopolies: Conquest and Corruption

    Historically, monopolies can be very effective, but they are also known for their abuse of power.
  5. Taxes

    Why Monopoly Is A Terrible Finance Teacher

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

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  7. Investing

    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. Investing

    Monopoly-Like Companies

    We might not have monopolies, but some businesses operate in industries where a couple of businesses essentially dominate.
  9. Investing

    Hasbro's Monopoly Revamps 1930s Game Pieces

    Hasbro's new Monopoly Token Madness Campaign introduces hashtags, emojis as replacements.
  10. Small Business

    6 Franchises That Are Cheap To Start

    These franchises are in the realm of financial reality for every-day people. Check them out to see if you'd like to run your own 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 are Common Examples of Monopolistic Markets?

    Providers of water, natural gas, telecommunications, and electricity have all been historically monopolistic markets. Read Answer >>
  3. What does it mean when a utility company has a natural monopoly on a market?

    Learn what it means when a utility company has a natural monopoly on a market and why natural monopolies are heavily regulated ... Read Answer >>
  4. What Are the Major Differences Between a Monopoly and an Oligopoly?

    The differences between a monopoly and an oligopoly include the number of firms in the market, type of barriers to entry ... Read Answer >>
  5. What do high economic profits in a given industry suggest about that industry?

    Learn how certain industries have high economic profits and what it says about those industries; the key is the industry ... Read Answer >>
  6. What barriers to entry exist in the utilities sector?

    Learn about the significant barriers to entry in the utilities sector, including large infrastructure requirements and governmental ... Read Answer >>
Hot Definitions
  1. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  2. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  3. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  6. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
Trading Center