Legal Thoughts On Frustration System Of Franchise

Franchising as modern business enterprise, a new business model and organizational form, is not only the inevitable outcome of the develop ment of market economy, but also a profound revolution in the field of commercial. The franchise business model has been widely spread since born in 1859 in New York. Franchiser and franchisee should have the equal status and independent of each other, and the relationship between the two also should be the equality. However, the franchisor of franchise organizations "continuous control", the specificity asset of franchisee and the opportunistic behavior of franchisor in the contracting process, make the interests are not equal between franchisor and franchisee, and make the franchisee in a weak position. In order to realize the legal value of fairness and justice, lawmakers must start to balance the interests of the adjustment mechanism, through the legal means to enable benefit prone to franchisee, so as to achieve the equality of interests between the franchisor and the franchisee.In 2007,the implementation of the "commercial franchising management regulations" with many new terms to ensure the benefit of franchisee, the twelfth of it on the "cooling off period" caused the attention of scholars and practitioners. Although it was first introduced in the franchise system, but it is not strange for consumers. The system of cooling off period is first applied to the direct selling. Although it has a long history and has developed to a relatively perfect situation in western countries, but there are rarely to organize as books, and the references are just legal provisions and some introductions. In this paper, cooling-off period is improved in the point of view of legislation with referencing successful experience, and to protect the interests of the franchisee.Except the introduction and conclusion, the body part is divided into four parts. The first section analyses the theory of cooling-off period of franchise system and then introduce the necessity of cooling-off period. In the next section, the current situation of cooling-off period in our country is presented and shows the problems by example, such as, vague content of ordinance, lack of dealing approach, and the deficiency of executive departments. The introduction of cooling-off period in foreign country is discussed in section 3, and the advantages of relevant legislations are summarized. The improvement of legislation, in section 4, should be done in some aspects: clear the content of ordinance, add the provision of dealing consequences, and in coordination with the department of rights protection.