Faculty: Economic Sciences and Business Administration Section: Business Administration.
Juridical regulations regarding the franchise contract
Student name:Radu Bianca Group: 8822
Franchise represents a modern technique of contractual nature through which is realised the trade of products and services, based on the collaboration between merchants.The manufacturer of a product or the service provider of a succesfull business allows to a merchant the right of manufacturing products or to provide services using his brand, technology and processes. This trading system of products and services appeared and was ordained in the United States as a reaction against antitrust laws which in order to counter the trend of concentration of capital, prohibited the sale of goods by manufacturers, that are going to be done by other companies. Due to its success, franchise has develop and improved gaining a huge practical use. The manufacturer of a product can establish franchise relationships with more then one gainer, founding a franchise network. Nowadays, there are many this kind of networks which go across the borders of one country, for instance McDonald’s, Pizza Hut, Kfc, Burger King, Starbucks, Lavazza, Segafredo, Illy in dinners and cafés industry, Sofitel, Holiday Inn, Ramada, Ibis in hotel industry, Neoset and BoConcept in furniture industry etc. Using a franchise presents many advantages; the manufacturer is relieved from the operation of trading the product and the service so that he can focus on improving the product or the service. For the beneficiary the advantage relies on the opportunity on the development of a manufacturing and trading activity of some products; providing services with low trading risc because in the development of the commercial activity is already being used a famous brand imposed on the market. Content
Franchising is regulated in our country by O.G. nr. 52/1997 regarding juridical regime of the franchise. According to Article 1, the franchise is a trading system based on a continuous collaboration between natural or legal persons, independent financially, by which a person, called the franchiser, grants to another person, the beneficiary, the right to operate or develop a business, a product, technology or service. The franchiser is a trader who is the holder of trademark rights; rights must be exercised for a period at least equal to the duration of the contract of the franchise; he gives the right to exploit or develop a business, a product, technology or service; it provides an initial beneficiary for the registered trademark; He uses the personnel and financial means to promote its brand, innovation, research and development and ensuring the viability of the product. The client is a merchant or a legal person, selected by the franchiser, which adheres to the principle of uniformity of franchise network, as it is defined by franchisers. Know-how is all formulas, definitions, technical documents, drawings and models, networks, processes and other similar items, that are used to manufacture and marketing of a product. Franchise network includes a number of contractual relations between a franchiser and several beneficiaries, in order to promote a technology, a product or service, as well as for the development of production and distribution of a product or service. There are three types of franchise:
Manufacturers use the product franchise to govern how a retailer distributes...