Franchise law

 

In the UK, there is no franchise law contained in any franchise-specific regulations or law. Franchise agreements are therefore the central legal foundation of any franchise and it is to a franchise agreement that you will generally turn in relation to any problems. Franchises are, however, also governed by the same laws that govern all other types of businesses. In particular, contract law will be the source of enforcing your franchise agreement.

Additionally, whilst there is no franchise law, there is some degree of self regulation provided through the British Franchise Association (BFA). The BFA is a voluntary self-regulating governing body that aims to promote ethical franchising. As it is voluntary, not all franchise businesses are members and there are no enforcement mechanisms. For member franchises, however, the BFA provides a ‘Code of Ethical Conduct’ which members should abide by. There is also a European Code of Ethics for Franchising developed by the European Franchise Federation.

Beyond these regulatory methods, the franchise agreement is the primary legal mechanism applying to your franchise, and contract law is the primary body of law governing it. When conflict in the franchise relationship arises, you will need to examine the franchise agreement to determine your rights and obligations. Therefore, rules of contract law relating to interpretation, unfair terms, breach of contract and termination will be particularly relevant.

The franchise agreement may also include an arbitration clause or other clause setting out how disputes will be resolved. Arbitration, or conciliation or mediation, can be useful alternative methods of resolving disputes.

Additionally, if you are running your franchise business as a sole trader, a partnership or a company or other corporate entity, you will be subject to the law governing that particular business entity.

If you would like to obtain legal advice on franchise law, Caven can put you in touch with a local specialist franchising solicitor free of charge. So, if you have any questions or would like our help in finding a local franchising solicitor please call us at 08001 221 2299 or complete the web-form above.

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