Research On Franchisor’s External Liability In Franchise

Commercial franchising, a type of Business Model, is an important business model in the development of market economy in China. With the rapid development of franchising in recent years, the number of franchise disputes is growing. The issue of franchising external responsibility sharing is particularly prominent. All of these problems should be solved in practice. In consideration of the lack of specific provisions on the external civil liability in the existing franchise law and the lack of theoretical research in this area, so the paper try to discuss this, and it will be worthy. This article studies the external civil liability of franchise system on the basis of jurisprudence analysis of franchise, compares the international and domestic legislation and case precedents, for the purpose of proposing the author’s view on the franchisor’s external civil liability in the franchise.The paper is composed by three parts as following:The preface part gives a brief introduction of the definition of franchise and the external civil liability, describes its current development in China and related legal provisions on the franchise. This part also points out the purpose and significance of this paper.Body consists of four parts.The first part describes the categories and the characteristics of the franchisor’s external civil liability in the franchise, investigates the complexity and alternative of the external civil liability in the franchise, and points out that the franchisor is liable for the franchisee’s tort or breach of contract to the third party. This part also discusses the factual and legal basis of the franchisor’s external liability.The second part studies the legislation and legal precedents abroad. Because of the particularity of franchise and the lack of direct legal provisions, the theoretical support and legal basis of external liability is needed under the existing legal framework. There are currently three representative theories: United state’s "vicarious liability", French "own liability", Russia’s "complementary liability", and their theoretical basis, judicial practice and shortage were analyzed separately.The third part describes the judicial practice of the franchisor’s external liability in China, analyzes the differences between "apparent agency " and "vicarious liability", describes the theoretical basis and the shortage of "apparent agency ".This part also discusses some other scholars’view on franchisor’s external liability, points out that every theory both have advantages and disadvantages. We can use the ripe system and the advanced theory for reference, make the rules to protect the rights of both side.In the fourth part, the author proposed different solutions to different situations according to China’s actual practice of franchising. This part proposes the view of the author that the franchisee should assume his own liability, while the franchiser’s liability shall be differentiated in accordance with the various of situation.Part three concludes with the summary of the writing process of this article, and points out the deficiency and the future direction for further study.