U.S. Franchise Regulation as a Paradigm for the European Union

Abstract

The protection afforded to franchisees differs widely across the world. Nations with economically strong franchise sectors typically regulate the contract’s bargaining phase and post-formation. Responding to the European Parliament’s call for a review of regulations governing Europe’s underperforming retail franchise sector, we propose reforms to counter the structural and economic inequality between franchise parties. Drawing on lessons from comparatively successful federal frameworks, we present a regulatory trifecta of mandatory disclosures to prospective franchisees, required express or implied contractual obligations and rights for both franchisors and franchisees, and compulsory adherence to certain protections of franchisees throughout the franchise relationship.