Legal remedies for deceptive and unfair practices in franchising

This article examines two major legal problem areas in franchising: deceptive practices in the selling of a franchise and unfair practices in the operation of a franchise system. Legal remedies for these deceptive and unfair practices are examined based on findings from an empirical study among state attorneys general. Franchising has become an important method or system of distributing a wide variety of products and services in the United States economy. As a system of distribution, franchising accounts for almost 32 % of all retail sales, employs over four million people and involves over 460,000 establishments (U.S. Department of Com-merce 1979). Franchising systems usually exhibit the following characteristics: (1) one party (the franchisor) grants to another party (the franchisee) the right to dis-tribute or sell certain goods or services; (2) the franchisee agrees to operate his business according to a marketin