Abstract

[Abstract(Law)] Protection of prospective franchisee in Franchising

  • DATE WRITTEN : 2020-11-02
  • WRITER : APCC
  • VIEW : 900
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The franchise business allows franchise headquarters to build and maintain a wide range of distribution networks, and franchisees can use their reputation and know-how with small capital. Franchising is mentioned as an excellent distribution system that can bring win-win consequences. However, franchisees often suffer damage because they impose unreasonable conditions and provide false information.

Prior to signing the contract, the franchisor shall issue a contract and an information disclosing document to the prospective franchisee, and the prospective franchisee must enter into a franchise agreement by negotiating with the franchisor at his / her own discretion. In the process, protection may be provided by legal means such as deposit of franchise fees. Therefore, prior to the conclusion of the contract, it is desirable to protect the applicant as a franchise candidate, and to receive appropriate legal protection as a franchisee at the time of the conclusion of the contract.

In addition, the franchise headquarters may impose certain burdens such as restricted business conditions or sharing promotion costs, but it is not considered applicable to prospective franchisees. There is a comprehensive overview of whether or not the fiduciary business has a unified image and whether there are certain obstacles to specific contents such as product quality and cost sharing and participation in events.
      
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