Franchises: Legal Aspects

Establishing a business, especially when related to a franchise, is a project of great importance that involves numerous legal aspects. Franchising is a collaboration between entities joined by a contract. Franchising involves a balanced and fair written agreement that regulates the relationship between franchisor and franchisee. Different regulations may exist, depending on the country where a venture is started, and the contract is a fundamental pillar of the franchise relationship, the document in which the obligations and rights of each party are specified.

Attempts to regulate franchise systems in the United States emerged in the 1960s. The lack of laws governing franchise relationships led the Federal Trade Commission (FTC) in 1979 to implement some basic regulations to control such arrangements. The FTC requires franchisors to present ...