Partner and Head of our German Franchise and Dispute Resolution Groups, Jiri Jaeger, is working with the German Arbitration Institute (DIS) to set up and chair their new working group on franchising. This will include the organisation of the relevant working group meetings, putting together an expert team, and developing relevant topics at the intersection of arbitration and franchise law. There are several reasons why the planned working group is of importance and interest to franchise businesses:
The franchise business is uniquely international, and so is arbitration. Franchisors and franchisees prefer arbitration tribunals with experts as arbitrators for instance, which the legal system of arbitration can accommodate. The freedom of choice is one of the key advantages of arbitration. In terms of qualifications of arbitrators, it is not only his or her knowledge of governing law that counts, but industry expertise, i.e. franchise expertise in the first place is highly relevant.
Another important aspect for franchise businesses when it come to international disputes is neutrality. Impartiality and independence are of paramount concern in arbitration. Players in the franchise business express the perception that there is no real alternative to arbitration for big franchise companies that are doing business on an international scale. When speaking to franchise businesses, they often convey the experience that foreign state courts will not necessarily treat all companies fairly. Plus, foreign courts might be unfamiliar with the particular franchise rules and principles that govern the industry.
Consequently, the aim is to discuss and elaborate on issues in this area with the DIS and the legal experts in the working group to make a significant contribution to the understanding and development of franchise law in the specific context of arbitration. Please watch this space for updates regarding the further development of this exciting new working group.
