FRANCHISING AND RESTRAINTS OF TRADE – RESTRAINING EX-FRANCHISEES FROM COMPETING WITH THE FRANCHISE NETWORK

Abstract

Franchising is a method of expanding a business that allows one (the franchisor) who has developed a successful product or service to increase his distribution network through the investment of others (franchisees) who want to own their own businesses. The relationship between the franchisor and his franchisees is extremely complex but at present it is treated as a normal commercial business transaction. Such an approach fails to take into consideration the entire commitment structure that underlies the franchise network. I have examined this in the light of certain cases dealing with restraints of trade and suggest that there is a need to develop a distinct body of law designed specifically to deal with franchising.