LAW 525 Chapter Notes - Chapter 8: Franchising, Franchise Agreement, Registered Mail
30 Dec 2019
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Less capital: faster growth, up-front fees collected, delegate operations to franchisee, franchisee more motivates to succeed, savings from economy of scale. Franchisor must invest in organization of the franchise model: more difficult to terminate a franchisee. Pros: greater chance of business succeeding (proven because lower costs and known brand) Initial investment & ongoing costs may be lower. Franchisor does not fulfil obligations to franchisee: obligated to buy goods and services from designated suppliers. While churning is not a common occurrence in franchising today, it does occur, and sometimes a single location may be churned several times. Arthur wishart act (franchisor disclosure act), ontario 2000. Imposes duty on franchisor to provide document disclosure contain prescribe info (found in the act: allows other franchisees to associate with each other. Section 2 application: go to page 8-1 an 8-2 for the history of how it came to be.
