On The Protection Of Franchisee's Right To Know

With the swift development of franchise in China, the mass media have been thronged with numerous franchise fraud related cases, which is a serious mar on the interest of associated investors. Therefore, in order to standardize the market conducts of franchise, it has become an imperative task to constitute and put into practice the pertinent effective laws and statutes, and to strengthen the guidance and supervision upon franchise activities. The author, by analyzing the existing problems of franchise and finding out their roots, has come to the conclusion that the prerequisite for giving a solution to franchise fraud is to establish the system of franchisee's right to know, which is a basic system that calls for necessary information disclosure by the franchiser to the franchisee that has proved effective in the developed countries'practice of franchise law. In combination with China's specific national situations and the currently applicable laws and statutes on franchise, due to the feebleness of civil compensation on violation of the franchisee's right to know, more attention should be given to the necessity and feasibility of the government's supervision as well as the industrial supervision during the compulsion of information disclosure, so as to ensure that the franchiser discloses sufficient and reliable information to the franchisee.