A Study On The Legal System Of Franchise

As a new and effective distribution mode of modern society, franchise gets more and more attention from the whole society. This mode is welcome to franchisees especially to individual investors. Franchise enters food industry, supermarket business, fashion industry, automobile industry, IT and many other industries. Developing rapidly, it accelerates to establish well-known national and local franchising brands for our country. Developing countries as well as developed countries find effective through practice that franchisor manages cooperation and distributes merchandise and service. And so we are attractive by this mode. This thesis includes four parts: the outline of franchise, typical regular in developed country or area such as United States and European Union, legal environments in our country, and speculation aiming at improving the legislation condition. In the outline part, the author uses some regulations of some authority organizations and our country to explain the definition and introduce the knowledge about franchise. A franchise uses local capital and management by contracting with third parties to operate a facility identified as offering a particular brand of goods or services. Franchise had not gone smoothly. And the practice in developed area proves that only improvement of legal system leads to excellent trail for franchise. A saying "there is no forbidden zone to franchise"illustrates that franchise is really energetic. We could find in value analysis part that franchise do good to the government, the franchisor, the franchisee and the consumer. It is welcome by the government because franchise could bring advanced management experience from foreign countries with low cost and could avoid making mistake. The franchisor is willing to adopt this mode for it won't take large amount of money. What he needs to do is only to authorize the right of using business mode and trademark or trade name to others. The franchisee could benefit from franchise for its convenience that he could own a well-known trade name and get a long-term training support and economies of scale from franchisor without pulling through in creating a new brand under high risks. And consumers love it because it increases the industrial credit to the society and customer satisfaction. The legal character of franchise is a contracting activity with one part authorizing right and the other part paying for it. It is special for the object of a series of intellectual property—a kind of intangible goods. At the second part of the thesis, the author makes a in-depth analysis in the legislation condition in developed countries or areas such as the United States and European Union. With a fairly long history of franchise the United States and European Union had encountered many problems and soaccumulated rich experience of the legal system for franchise. Information disclosing law plays a very important role in the United States, while the European Union regulates franchise through competition law. As franchise developing rapidly in our country, we should make specialized regulation for franchise to standard the practice in franchising system and ensure legal rights for consumers. On this respect, we could use experience of US and EU for reference. At the third part, the author introduces current legal system and conflict of franchise in China based on two typical cases. Franchise can bring franchisor not only long-term advantage but also short-term profits as he could get fees from franchisee at the first place. So some cooperations especially some middle or small companies launch franchise without proper qualification and even try to lay a trap to others to earn money. We should pay attention to these problems and try to solve them through perfecting relative legislation. To creat a better legal environment, it needs not only self–discipline of franchising industry but also relative laws and regulations improved. Basing on probing into the legal problems remained among the franchising practice, the author puts forwards some speculation aiming at perfecting present legislation condition. Considering the complicated condition, the author suggests that it is supposed to set up a administrative regulation for franchise. The new law could emphasize on standardizing...