Commercial Franchise And Antitrust Laws And Regulation Research

Due to its vigorous vitality and expansive power, franchises, described as a scale-oriented, low-cost and business-wise business model, has become pervasive all over the world throughout its development, ever since it arrived from the United States in the mid 19th century. In western industrial countries, franchising has penetrated into a variety of industries, namely restaurants, supermarkets, fashion, auto, cosmetics and IT, and so forth, at an extraordinarily high speed; abundant name-brands, have been established due to franchises. In light of the full bloom of franchising, related laws and regulations, accordingly, are thriving. In spite of its delayed application, China has witnessed a top-speed development of franchises, which is one of the derivations of both globalization and trade liberalization.In terms of its substantive characteristics, a franchise is a collection of intangible property rights; at it simplest, the core of this business model is the output of intangible assets. Franchises, as cited, are a special form of intellectual property rights which maintains the identity within its networks, thereby accounting for the monopolistic conducts by the Franchiser, tied-in sales, resale-price restraints, area restriction in particular ~ which are prohibited by Anti-monopoly Law.Scrutinizing research and practices abroad, monopolistic conducts derived from franchise has been regulated by EU Competition Law, American Anti-Trust Law, and related statutes in other developed countries. As China furthers its entry into the WTO, franchising has geared China to international standards and norms; franchises, moreover, maintain large-scale, top-tier development in a wide range of industries. The new Anti-Monopoly Law in China, put in force on August 1st, 2008, without a doubt, will exert regulative influences on franchises and related practices. Studying the interrelationship of franchises and Anti-Monopoly Law, hence, is of momentous theoretical significance and of far-reaching practical significance as well.In board terms, this research analysis aims at putting forward feasible and effective proposals on China's future legislative regulation by applying theories and cases relevant to current circumstances. This paper, in particular, starts with primary concepts and definitions of a franchise, namely the definitions provided by the International Franchise Association, American Federal Trade Commission, the EU Committee and the Japanese Franchise Association as well, to lay the theoretical foundation for potential monopolistic conducts. The following part will further analyze possible factors and major regulative principles in the USA and the EU-- the rule of reason and the rule of perse practiced in the USA and also the rule pursued by the EU. Particular scrutiny on both the inner features which justify the monopolist conducts related and their detrimental effects yielded will be posed in this segment. Emphasis will be posed on the third section, which researches on essential manifestations of such monopolistic conducts on the grounds of theories and cases related. It mainly include three major types of monopolist conducts resulted from a franchise, namely tying purchase, resale price maintenance and restrictions on market. The last section reveals the significance of China's legislation. A practical reference is presented by comparing said regulation to foreign practices and standards. Accordingly, on the basis of current laws and regulations applied in China, in-depth analysis of legislative modes and legal structures in both America and the European Union will be presented, in terms of theories and cases related. Lastly, this paper also offers feasible and effective proposals for future legislative regulation, concerning the issue of the new Anti-Monopoly Law in China.