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"Esports" describes the multibillion-dollar industry1 of computer facilitated competition, typically through computerized games. This community is a worldwide phenomenon, with countries such as Germany, China, Russia, and South Korea investing heavily in the development of professional Esports players and infrastructure.2 In fact, in November 2018, almost 100 million unique viewers watched the final match of the League of Legends, an Esports video game, which was more than the viewership of the 2018 Super Bowl.3 Yet, the Esports industry is very much in its infancy in terms of organization, business opportunity, and mainstream appeal.
Development of the Esports ecosystem has historically lagged in the United States, trailing behind its European and Asian counterparts.4 However, certain cities in the United States have robust and thriving grassroots communities and traditional sports powerhouses investing heavily in infrastructure and development of professional Esports athletes and teams. One of those cities is Dallas, Texas, where moguls such as Dallas Mavericks' owner Mark Cuban,5 oil magnate Kenneth Hersh,6 and Dallas Cowboys' owner Jerry Jones7 are investing in Esports teams and developing community infrastructure, bringing gaming culture and viewership to the mainstream.
This article provides a survey of the Esports landscape, with a discussion of how the franchising model has brought stability and structure to this new industry. It covers the basics about franchising as a legal and business structure, traditional professional sports franchising, franchising of Esports leagues, and franchising of ancillary entertainment and training services. It also notes challenges faced by Esports athletes.
I.Background
A. The Traditional Franchising Infrastructure
To set the stage for the adoption of franchising in Esports, a primer on traditional franchising is necessary. Arguably, the birth of franchising could be attributed to Isaac Merritt Singer, the founder of Singer Sewing Machines.8 He devised a way to offer convenient repair services for his sewing machines through a license to repair engineers for use of his parts and trademarks. These repair engineers could rely on that trademark to provide repair services to a wider range of sewing machine customers in geographic areas not readily accessible by Mr. Singer.9 This licensing framework has developed into a defined yet flexible infrastructure that spans restaurants, personal and commercial services, entertainment services, and product production.
Simply put, a franchise is a license from the...