Franchisor Failure: An Assessment of the Adequacy of Regulatory Response

Abstract:     
Franchisor failure is one of the most problematic areas of the franchise relationship. It impacts negatively on landlords and other suppliers, but the contracting parties that are currently without legal rights to respond when a franchisor fails, and thus without consumer protection, are its franchisees.

In this thesis I explore the current contractual, regulatory and commercial environment that franchisees inhabit, within the context of franchisor failure. I conclude that ex ante there are opportunities to level the playing field through consumer protection legislation. I also conclude that the task is not one solely for the consumer protection legislation; the problem should also be addressed ex post through the Corporations Act.

Number of Pages in PDF File: 368

Keywords: administration, asymmetry, Australia, bankruptcy, benchmark, best practice regulation, business consumer, consumer protection, contracts, Corporations Act 2001 (Cth), cost benefit, disclaim, disclosure, due diligence, education, executory contract, exploitative contract, fail, franchise agreement

JEL Classification: D21, D23, D40, D61, D78, H32, K12, K22, K39, L10, M55

working papers series