Market Concentration, Earnings and Turnover: No-Poaching Clauses in the Quick Service Restaurant Industry

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I analyze the impact of Quick Service Restaurant franchisors’ no-poaching clauses on historical employee earnings and turnover for the Restaurants and Other Eating Places industry. I examine the 41 largest Quick Service Restaurant franchisors and the labor markets of 10 major U.S. cities over 11 years from 2006 to 2016. No-poaching clauses restrict intra-franchisor movement of employees and, if in use, can be found in a brand’s franchise disclosure documents. I create a panel dataset using no-poaching agreements data, industry data on earnings and turnover, and business establishments’ employment data. Using a panel regression with fixed city and time effects, I determine that no-poaching clauses have an insignificant effect on turnover but do exhibit a statistically significant effect on earnings. Specifically, a 25 percent increase in market concentration related to no-poaching agreements results in a 2-6 percent decrease in average monthly earnings, depending on employment status, age, and education level.


Type of resource text
Date created May 3, 2019


Author Tejeda, Manuel David


Subject Department of Economics
Subject No-Poaching Clauses
Subject Market Concentration
Subject Quick Service Restaurant
Subject Franchisor
Subject Turnover
Subject Earnings
Subject Herfindahl-Hirschman Index
Subject Group-Specific Labor Index
Subject United States
Genre Thesis

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This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).

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Preferred Citation
Tejeda, Manuel David. (2019). Market Concentration, Earnings and Turnover: No-Poaching Clauses in the Quick Service Restaurant Industry. Stanford Digital Repository. Available at:


Stanford University, Department of Economics, Honors Theses

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