Research On The Operation Legal System Of Small Business Financial Services Franchisees

Small business financial services franchisees (hereinafter referred to franchisees) is under the China Banking Regulatory Commission requirements to address the problem of financing small businesses. Before the release of this rules, CBRC has developed a number of provisions as foreshadowing work for the foundation of the franchisees. The outbreak of the financial crisis make the finance of small enterprises more difficult, and accelerates the release of the system of franchised agencies. As an innovative financial system, there are plenty of risks and problems exsited in franchisees. This article based on the existing legal framework and the latest franchise practice in China, provides the suggestion on how to improve the franchisee operation.The introduction introduces the background of the franchisees system and the problems exposed in the franchisees operation. Based on the existing literature, the author described his own research ideas.The first chapter is to analyze the franchisees'theory. In this regard, the author used the bank reconstruction theory and institutional change theory, that the franchise is essentially a rebuilding bank stem from the banking institution intention to provide specialized financial services to small businesses. The rebuilding bank is the results of changes from banks operating system level. Because of this institutional change is mandatory, and some in advance, many banks are not required by the CBRC division mode, but adopted the affiliated branches of the model. In view of this reality, the author has re-defined the legal nature of two kinds of franchisees.The second chapter analyzes the operating characteristics of franchise organizations. In the aspect of service object, franchisees limited to small businesses. In the aspect of operating mechanism, the franchisees adopt more streamlined business processes, greater autonomy and relatively smaller responsibility. In the aspect of financial products, franchisees provides more diverse way of security, more flexible repayment methods. These features enhance the level of small business financial services, but also increases the financial risk of franchised agencies.Based on the second chapter, Chapter III discusses the risks and problems existed in the franchisees operation.This includes three aspects: First, as the special nature in the service object, the operating mechanism and the financial products, the franchisees face greater financial risks. Second, as new financial institutions, regulatory agencies do not place the regulation of franchised agencies. Third, supporting legal system is still not perfect, franchisees operating environment is poor.For the risks and problems the franchisees face, under the concepts of financial security and financial efficiency.In the fourth chapter,the author proposed to perfect the legal system of the franchise organizations. By strengthening internal controls to prevent financial risks of franchise institutions, to develop rules enhancing franchisee monitoring, to accelerate the establishment of risk compensation fund for small business loans,amend loans rules, establishing a unified real estate registration system to optimize franchisees mortgage operating environment.The conclusion clear up the idea of this research and make a summary of the author's point of view.