Franchising Legal System Of Disclosure Of Information Research

Franchising is an arrangement in which a franchisor grants prospective franchisees the right to use his own trademarks, firm names, patents, trade secrets, business model, etc. through a franchising agreement. And at the same time, prospective franchisees should give payment to the franchisor to provide services in product sales or business operations under a unified business model.As a low-cost, large-scale, high-efficiency business model, Franchising has been developed in Western countries for a long time since19c60s. Thus franchising legislation is relatively sound in these countries, in which the information disclosure system as the core of franchise legislation has become an example for other countries in order to correct information asymmetry of franchising parties. Franchising began to take root in China after Kentucky Fried Chicken entered Chinese market in1987, accordingly, Chinese construction of franchise information disclosure system is relatively late.This thesis focuses on two major contents of franchise information disclosure disclosure obligations and liability system for violation. By comparing foreign advanced legislation, especially American franchising legislation, we analysis the problems existing in legal system and put forward improvement proposals.This thesis was divided into three chapters. The first chapter provided a brief overview of the franchise information disclosure system, including franchise definition, legal characteristics, our franchise disclosure problems, the necessity for establishment of the franchise information disclosure system. In today’s franchising activities, some franchisors operate franchising lacking basic conditions, for purpose of deceiving; some immature franchisors use their imperfect franchise system to operate franchising. Firstly, this chapter used interest conflict theory of economic subjects, asymmetric information theory, transaction cost theory to show the necessity of establishment of franchise information disclosure system; then explored from legal aspects that establishing franchise information disclosure system will help to protect franchisee’s right of knowing, realize justice of contracts, and achieve franchising regulation. The second chapter discussed the franchise disclosure obligations, including the specific subject, object, basic principles, time, manner and exemption of the disclosure obligations. China’s highest government approved the "Regulations of Commercial Franchise" on January31,2007, the Ministry of Commerce subsequently formulated the "Information Disclosure Measures of Commercial Franchise" as the implementation of the initial, setting up together for the legal system of franchise disclosure. Through this chapter we analysis the problems existing in legislation of information disclosure obligations and put forward improvement proposals by comparing foreign advanced legislation.The third chapter discussed liability system of violation for information disclosure, investigating behaviors of violating disclosure obligations, civil liability remedies-contract cancellation, termination of the contract, damages. We also analyzed the nature of civil liability for damages and specific rules, and civil damages liability should be recognized as a special tort liability. The author suggested that civil damages liability should mainly adopt a principle of liability without fault-based, supplemented by the principle of presumption of fault. Finally, by comparing the laws of foreign countries, we obtained shortcomings of civil liability, administrative liability, criminal liability about violating obligations of franchise information disclosure and gave suggestions how to improve these liabilities.