Study On Legal Protection For Franchisees

According to the essence of relationship in franchise, franchisors and franchisees are main actors entitled with equal status and mutual independence. Given the equal provision of this civil and commercial relationship, both parts involved should carry out transactions in accordance with the principle of consultation on equal and voluntary footing so as to achieve the maximum of their individual interests. However, a franchisor's "continuous control" on franchise organizations, long-term contracts of franchise with incompleteness and formalist style, as well as appropriative asset invested by a franchisee in contracting process and a franchisee's opportunistic behavior lead to the inequality and the imbalance of the relationship between franchisors and franchisees. And these also make the franchise relationship out of balance both on fait and on interest, which turn the original equal franchise relationship into the one with affiliated connection. In such situation, the franchisees are in a weak position whose rights are easy to be damaged. Based on the previous studies, the author carries out research towards the urgent existing legal issues in the practice of franchise from the perspective of legal protection for franchisees. This thesis focuses on a franchisor's infringement on a franchisee's rights in the development of franchise organization. It is embodied in the unqualified franchisor's fraud by making use of franchising, the increasing risk of operation due to inadequate information disclosure, the unreasonable restrictions towards a franchisee from the formalist style of franchise contracts, and so on. This thesis puts forward deficiencies on the legal protection system for franchisees in reference to the related systems of the United States, Australia and other developed countries. Hopefully, it will improve the legal mechanisms of the legal protection for franchisees, and provide some suggestions on legislation and legal application, in order to better protect the interests of franchisees and promote healthier franchising development in China.