Vertical Vertigo: Brian Callaci's book describes the deregulatory strategies franchisors use to protect their profits.

https://prospect.org/2026/04/10/apr-2026-magazine-vertical-vertigo-franchise-deregulation-antitrust-law/


Credit: Petros Karadjias/AP Photo





Twenty years ago, Bhupinder “Bob” Baber shot himself three times in the chest with a .380 handgun inside the bathroom at his friend’s Quiznos in Whittier, California. Baber ran two Quiznos in nearby Long Beach, and at the time of his suicide, he had sunk $100,000 and 18 months of his life into litigating Quiznos over a venue and arbitration clause, before the court ever got to hear the merits of his case. The Toasted Subs Franchisee Association, of which Baber was a member, published his last words on their website, describing how the legal dispute had ruined his life. “My struggle will continue after my sacrifice,” he wrote.

In response, Quiznos accused the Toasted Subs Franchisee Association of exploiting Baber’s death, and demanded they instead publish an apology calling their own actions “morally reprehensible,” as well as dropping any and all legal claims moving forward. This would cure the association’s supposed breach of contract. The association refused, and so 11 days after Baber’s death, Quiznos terminated its contracts with the Toasted Subs Franchisee Association’s eight board members. Seventeen days after his death, Quiznos notified its remaining franchisees that “from time to time, we need to take the steps necessary to protect the brand, as we have in this case.”

Chains of Command: The Rise and Cruel Reign of the Franchise Economy, by Brian Callaci, unbundles the business and legal strategy behind why a franchisor’s branding power is inextricably tied up with the treatment of its franchising partners. The story begins with Dunkin’ Donuts founder William Rosenberg, who banded together with other early franchisors as the International Franchise Association (IFA) in 1959. The IFA had a simple goal: protect franchisors from antitrust enforcement and organized labor. And they triumphed. “The IFA is the umbrella entity that, along with individual Franchisors, has enough money and power to buy the legislation that protects the Franchisor, and exploits the Franchisee,” Baber wrote in his suicide note.

It took decades to accomplish. But the IFA achieved near-immunity from the antitrust laws thanks to a dispute between a chain of retail electronics stores and a television maker. Before 1977, franchisors restricting how a franchisee operated their business was presumptively illegal under the antitrust laws. But in Continental T.V. v. GTE Sylvania, the Supreme Court upended this precedent by requiring that any alleged harm in a vertical relationship be analyzed on a case-by-case basis. No longer would franchisors need to fear the “haunting question” of the Sherman Act, the IFA’s attorney Philip Zeidman said afterward.

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