Who reports earning when reporting is optional? The market for new franchises

When a franchisor offers to sell new franchises, disclosures relevant to the earnings of franchise units are optional. I find that the 26% percent of franchisors who volunteer earnings-related information tend to impose greater investment risk on new franchisees in the form of (1) higher contractual payments and (2) greater product demand uncertainty. I also observe that larger franchise systems, which collect data from more locations and therefore have more precise proprietary information, are less likely to disclose. This finding is contrary to what has been observed in the securities market, where large firms are associated with more voluntary disclosure.