This study examines the interaction between influence factors on the contractual mix of Brazilian franchised chains. Two factors are discussed in more detail. First, geographical dispersion of outlets increases monitoring costs, which requires performance incentives mechanisms. Agency Theory proposes that powerful performance incentives are obtained when the local manager is shifted to residual claimant of the outlet. Reciprocally, more automated manufacturing processes increase the capacity of monitoring networks, reducing the need for such incentives. Tests are performed using information from 191 Brazilian franchised networks. Cross-sectional analysis supports our hypothesis: both vectors act in the expected direction on the distribution...