Comparative Legal and Economic Analysis of Franchising

Abstract

Franchising is a business model that has been converting dozens ofintangible assets into tangible in the history of mankind. Thus, nowadays it byitself covers a wide range of institutional aspects of law and economics.Besides, a franchise runs according to Nash’s Equilibrium theory. A player canachieve the desired outcome by not deviating from their initial strategy. For thispurpose, the franchisor provides an amount of assistance to the franchisee instarting and managing the business activities.De facto, principles of equality are slightly different for franchise contracts.This is because the results of the contract cannot be achieved without the strictsupervision and advice of the license holder.Therefore, this short comparative research has considered legal and businessissues relating to franchise, including the main contract law requirements, thedisclosure obligation, patent protection, vertical restraints, and the generaleconomic outcome of franchising in some countries.