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10 Int'l J. Franchising L. 3 (2012)

handle is hein.journals/intjoflw10 and id is 1 raw text is: RECENT TRENDS IN FRANCHISE RELATIONSHIP LAWS RECENT TRENDS IN FRANCHISE RELATIONSHIP LAWS John Sotos, Partner, Sotos LLP, Toronto, Canada The global franchise regulatory landscape is dominated by legislation setting out franchisors' pre-contractual disclosure and registration obligations. As such legislation offers no remedies for franchisees beyond contract formation, some jurisdictions, including priority markets for international franchisors, have enacted relationship legislation laws regulating the parties' continuing business relationship in addition to or as an alternative to disclosure and registration laws. This article provides a unique overview and analysis of franchise relationship laws around the world and of the aspects of the franchise relationship these laws typically address. These laws generally do not impose requirements that are so burdensome they would deter a franchisor from entering into franchise agreements, but franchisors must take them into account when drafting their agreements. Introduction123 Beginning in the 1950s, with franchisors such as McDonald's, Midas Muffler, and Holiday Inn, the franchise business model has become a popular growth vehicle in both North America and worldwide. That said, the coming of age of business format franchising in the United States during the mid-20th century brought with it abuses by some opportunistic franchisors seeking to line their pockets at the expense of their franchisees. During the late 1950s and throughout the 1960s aggrieved This article was originally prepared as a paper given at the Annual Conference of the International Bar Association in Dubai, October/November 2011, and is reproduced by kind permission of the International Bar Association- 2 1 wish to express my sincere appreciation to Christine A. Jackson, an associate of Sotos LLP, for her invaluable assistance and contribution in drafting this paper. 3 I further wish to extend great thanks to Professor Karsten Metzlaff (Noerr LLP), Anna Tsirat (Jurvneshservice), and Tao Xu (DLA Piper), for their exceptional editorial contribution and assistance with this paper. franchisees sought to restrain this opportunistic behaviour by bringing actions for redress based on various theories of contract, tort, unjust enrichment, and fiduciary law, and on statutory anti-trust law and securities law. The franchisees and the regulators, however, found the results largely unsatisfactory, leading to intervention by certain of the states in the U.S., the U.S. Federal Trade Commission, and the Province of Alberta in Canada in the form of franchise disclosure and registration legislation and regulations in the early 1970s. This initial attempt at franchise regulation was directed at the franchise granting process, and attempted to level the information playing field. Pre-contractual disclosure regulations require franchisors to provide prospective franchisees with certain information about the franchisor, its affiliates, existing and former franchisees, the franchise business, the franchise contracts, the money, and other matters to enable the prospective franchisee to make an International Journal of Franchising Law Volume 10 Issue 1 -2012 © Claerhout Publishing Ltd.

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