Laws of Franchising

Franchising has been specifically regulated in only a few countries. In the UK, there is a leniency towards franchising business opportunities. The complexity of the relationship between a franchisor and a franchisee and the large number of areas it involves, is partly to blame for the non-promulgation of franchise laws in the regulated countries. Countries that have laws to govern franchising businesses are, to a large extent, detailed and restrict any malpractices in the franchising business relationship. These laws had become necessary because of the practice of some franchisors to circumvent the franchisee’s rights to disclosures of a franchisor’s business performance, and restrict management and product support.

International Laws: Competition law or Anti-trust themes

Competition law is designed to eliminate activity and conduct that is likely to hinder the free play of competition in the marketplace. While most of the nations have adhered to this concept in varying degrees and have devised ways to keep the competition free, a few countries still need to fully embrace this approach.

Labour Laws

Labour laws are important for international and domestic franchises, especially in relation to the various outlets, shops and offices in which persons are employed. No franchising contract can deviate from the applicability of the labour laws. The labour laws govern the day-to-day conditions of employment that are particularly relevant in the context of franchising when an outlet is shut down or business is sold, in relation to the amount of compensation payable by the master franchisee, franchisor or franchisee.