Franchising : will a harmonised legal approach be effective in the EU?

Abstract

Since emerging in Europe during the 1970s, franchising has been adopted as a business model by many undertakings, particularly to facilitate cross-border expansion. Despite this, franchising is still underperforming in the European Union (‘EU’) when compared to non-EU countries, namely the United States (‘US’) and Australia. Whilst the latter countries have a robust legal framework to regulate this business model, franchising in the EU is self-regulated and remains unharmonized. The first chapter of this dissertation shall analyse the development of the definition for franchising through EU legislation and jurisprudence. Due to its hybrid nature, legally defining franchising has proven to be challenging. Hence, by virtue of this study, the essential elements of franchising shall be determined and a draft definition of franchising is proposed. The second chapter shall critically analyse how the EU views and interprets franchising through its competition laws and jurisprudence. Through this analysis, the shortcomings of the current EU regulatory framework shall be depicted. An overview and critical analysis of the applicable legal frameworks for franchising of the EU Member States, as well as in Australia and the US shall then be undertaken in the third chapter. Here, particular focus shall be given to the different approaches taken by jurisdictions adopting franchise-specific legislation as opposed to those applying their general laws to different elements of franchising and the franchise agreement, including the pre-contractual disclosure and the various rights and obligations of both franchisors and franchisees. This dissertation shall conclude that enacting a single EU regulatory instrument would harmonise the EU legal landscape for franchising and increase legal certainty within the EU. Consequently, this would improve the performance of franchising within the market.