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9 Int'l J. Franchising L. 3 (2011)
The Regulation of Franchising around the World

handle is hein.journals/intjoflw9 and id is 89 raw text is: THE REGULATION OF FRANCHISING AROUND THE WORLD THE REGULATION OF FRANCHISING AROUND THE WORLD Mark Abell, Partner, Field Fisher Waterhouse LLP, London, UK There are 30 countries that have franchise specific laws and although the influence of US regulation can be detected in much of it, there is a strikingly heterogeneous approach which can make the international roll-out of franchising somewhat more complicated than it need be. This article seeks to analyse and categorise all 30 laws and identify the ways in which they seek to regulate franchising. The analysis identifies three basic categories of franchise regulations and shows that the content of franchise regulations is clearly determined by their overriding purpose, with the foreign trade/investment, antitrust and pure franchise regulations showing clear and obvious differences from each other. Franchise laws can be divided up into three separate types, each with a distinct purpose and characteristics. These are: (i) Anti-trust regulations; (ii) Foreign trade/investment regulations; (iii) Pure franchise regulations. National franchise laws can be placed into these categories by reference not only to their substantive content but also their origins. Anti-trust regulations are aimed at preventing restraint of trade and generally focus upon classical competition law issues such as tying, full line forcing, retail price maintenance, exclusivity and so on. These are found in Japan' and Venezuela2. The I Japan Fair Trade Commission Guidelines, April 2002 - These provide for disclosure and offer guidance on vertical restraints. 2 The Venezuelan Pro-Competition Agency's Guidelines for the Evaluation of Franchise Agreements, January 7, 2000 - These are based upon the previous EU Franchise Block Exemption (Reg EU 4087/88). EU has this type of regulation in the form of Article 101 of the Treaty on the Functioning of the European Union and the Vertical Restraints Block Exemption. Foreign trade/investment regulations are typical of developing markets with either a protectionist economic policy or distinct political aims, such as the distribution of wealth. These are found in China, Indonesia, Kazakhstan, Korea, Moldova, Russia, Ukraine, Belarus, Barbados and Vietnam. Typically they seek to regulate the entry into their domestic market of foreign business systems that escape the restraints placed upon direct foreign investment. Pure franchise regulations focus upon areas of potential abuse in franchising, namely pre- contractual disclosure and the in-term relationship between the franchisor and its franchisees. These are generally symptomatic of more developed markets and are found in the USA, Australia, Canada, Brazil, Taiwan, Mexico, France, Spain, Italy, Belgium and International Journal of Franchising Law Volume 9 - Issue 3 - 2011 C Claerhout Publishing Ltd. 3

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