Study On Legislation Control Of Restrictive Competition Practices In Commercial Franchise

Commercial franchise is one of successful modern marketing patterns. It prevails around the world because of its unique managerial mechanism and scale, low-cost expansion. It brings fresh air to the commercial circulation as well as legal issues. By adopting the business model of franchise, the franchiser usually uses his financial advantage and resources to restrict competition, which is sometimes irrational, even illegal. In many other countries, this kind of restrictive competition is not totally banned, but regulated after analyzed with bifurcated approach. Currently in our country, the academic research about the restrictive competition practices in commercial franchise is still ongoing, and the legislation control about the practices is not perfected yet. Therefore, the booming practices of commercial franchise and the related legal provisions which lagged behind contrast distinctly. This paper adopts the basic theory about the commercial franchise and the legislation control of restrictive competition, refers to the systems of the United States and the European Union which regulate the restrictive competition practices in commercial franchise, analyzes the defects in our system according to the legal provisions, and then puts forward proposals on how to improve it.This paper is divided into four sections:In section one, the basic theory about the commercial franchise and the legislation control of restrictive competition will be introduced. Firstly, this paper will start with the concept of commercial franchise, and then summarize the characters and patterns of commercial franchise after introducing several authoritative concepts. Secondly, it will explain the nature and manifestation of restrictive competition practices in commercial franchise, and dissect the legal parts and illegal parts of the practices. Thirdly, the pattern and principle of the legislation control about the restrictive competition practices in commercial franchise will be illustrated.Section two will introduce foreign legislation control systems about the restrictive competition practices in commercial franchise, which are mainly from the United States and the European Union. Firstly, there will be a brief introduction about the above-said system of the U.S during the period of and influenced by the school of thoughts, and explanation of related legislation model and judicial practice of the U.S. Secondly, there will be a study about the history and development of the legislation control of restrictive competition practices of the European Union, and explanation of related legislation model and judicial practice of the E.U. Thirdly, after the analysis of both systems, this paper will compare them from such aspects as legislation model, detailed institution and the force of the regulation, and then conclude the things that we can learn from them.In section three, this paper will find out and analyze defects from such provisions as tying products, resale price maintenance in vertical restrictions, sales territory restriction, grant-back clause and non-compete rules, in accordance with the specifications of the restrictive competition practices in commercial franchise, and then discuss the imperfection and the week operability of the current regulations, and the discordant between laws and regulations.Section four puts forward proposals on how to improve our legislation control about the restrictive competition practices in commercial franchise. In general, this paper will talk about how to choose the guiding ideology and the legal model of the legislation control about the restrictive competition practices in commercial franchise; in detail, it will offer a proposal on how to design the system by enumerating the standards and contents of the banned restrictive competition practices in commercial franchise.