Franchise Information Disclosure System

Franchising is the popular business model in the world. Although there are many benefits to both parties of franchising contract, There are lots of risks, especially to franchisee . In order to protect the rights of franchisee , It is necessary to set up Information Disclosure System in Franchising.The author regards three economy theories as the theoretical basis of the Information Disclosure System in Franchising. That is : the theory of marketing abnormally , the theory of transaction cost and the theory of modern investment composition.The franchiser has the obligation to disclose the necessary information about franchising , which he is engaged in ,to franchisee applicant to the signing of contract . These information includes both objective information and predictive information that the author name as "hard information " and "soft information ". Some are disclosed before the franchising contract signing, other are disclosed later. Franchiser must disclose them really, completely, and exactly.If franchiser doesn't perform his obligation to disclose the information, he should bear law responsibility. The victim can acquire succor according to law of contracts or torts.At the last, considering the reality of law system in franchising in China, the author gives some pieces of advice to set up the system of Information Disclosure in Franchising.