This article was originally published by Who's Who Legal in November 2013 (view it in Who's Who Legal's website >)
Franchising has been identified by the European Commission’s Competition Directorate as being of great economic importance to the European Union. Indeed, European jurisprudence, such as the well-known Pronuptia case and decisions of the Commission including Yves Rocher, ComputerLand, ServiceMaster and Charles Jourdan, all underscore the important role of franchising in furthering the establishment of a single market in the EU. However, although European competition law treats franchising in a relatively benign manner, member state law takes a somewhat different and entirely heterogeneous approach.
Eight EU member states have franchise-specific regulatory regimes, but no two are the same. The remaining 20 member states regulate franchising entirely by the application of general law, again with little homogeneity. Unexpectedly, it is some of the member states without franchising-specific legislation that most heavily regulate franchising. Those member states with Germanic legal traditions treat franchisees as quasi-employees, quasi-consumers and commercial agents. Comparative analysis of empirical data collected by the author makes it possible to determine which of these 28 member states most rigidly regulate franchising and to benchmark them against the well-established franchising regulatory regimes found in the USA and Australia.
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