The Regulation of Franchising in the New Global Economy

The Regulation of Franchising in the New Global Economy

Elizabeth Crawford Spencer

While franchising promotes economic and social welfare objectives, Elizabeth Crawford Spencer argues that monitoring and regulation are needed to address potential areas of abuse of the form that can result in costly market inefficiencies.

Chapter 6: Summary of Trends in Franchise-specific Legislation

Elizabeth Crawford Spencer

Subjects: law - academic, intellectual property law

Extract

215 Oceania: Of the approximately 14 countries in Oceania, there are about four in which McDonald’s operates. Australia is the only jurisdiction that currently regulates the sector. New Zealand has an active franchise trade association and has been considering legislation to regulate the sector. PATTERNS IN THE ADOPTION OF FRANCHISESPECIFIC LEGISLATION AND THE DISPOSITION TO IMPLEMENT LEGISLATION The pattern of the growth of regulation of the sector has been uneven. Of the 30 countries that now regulate the sector, three jurisdictions adopted legislation between 1970 and 1980 (Barbados, the US and Alberta, Canada); two between 1980 and 1990 (France and Japan); 16 between 1990 and 2000 (Albania, Brazil, Mexico, Moldova, Romania, Russia, Spain, People’s Republic of China, Taiwan, Georgia, Indonesia, Malaysia, Macau, Kyrgyzstan and Australia); and 13 since 2000 (Belarus, Belgium, Estonia, Italy, Lithuania, Sweden, Ukraine, Kazakhstan, Korea and Vietnam as well as three Canadian provinces, Ontario, New Brunswick and Prince Edward Island). Two countries substantially revised their legislation between 1990 and 2000 (Mexico and Canada) and six have revised franchising legislation since 2000 (Mexico, Spain, China, Taiwan, Japan and the US). Some countries with already well-established regulatory regimes such as Australia and the US review and revise their legislation periodically. There seems to be no common standard regarding ongoing monitoring and review of legislation, which appears to take place more on an ad hoc basis. Best practice of course dictates that procedures should be in place for review on a routine basis, to avoid such review occurring only in...

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