The Regulation of Franchising in the New Global Economy
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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.
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Chapter 9: Future Directions for the Regulation of Franchising

Elizabeth Crawford Spencer


This book began by describing the nature of franchising, the franchise relationship and the governance of that relationship in the context of current theoretical approaches to governance. The second half of the book has been devoted to legislative approaches and tools with a survey and analysis of franchise-specific legislation. While the information presented here offers many interesting points of departure for regulators, practitioners and researchers, there are two key gaps which need to be addressed here by way of conclusion. One important gap is in the assessment of the effectiveness of regulation. No one has fully tested its costs and benefits. Assessment of the regulation of franchising in any jurisdiction should be part of a program of monitoring and revising the regulatory program to ensure its optimum function, rather than arising on an ad hoc basis often in response to political exigencies that then skew the process. Among the eight countries that have revised franchising legislation since 1990, there seems to be no common standard regarding ongoing monitoring and review of legislation. Regulatory review should be fully participative and transparent and should be scheduled at regular intervals and at various levels of detail in order to mitigate the impact of political pressure on regulatory process. The second gap, perhaps more important, is that this survey of the results of processes of regulating does not peel back this information in order to comment on the processes of regulating themselves. Looking at outcomes is one way to evaluate process, but it is...

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