The Necessity of Establishing Laws for Fair Franchise Agreements : Focusing on Abuse from the Dominant Bargaining Position

Abstract

In recent years, use of franchise agreements is rapidly increasing between business owners and business operators, which has led to an increase in litigation due to conflict over the content and implementation of franchise contract agreements. Litigations and conflicts about what the contract authorises arise mainly from a master-servant relationship between the franchiser and the franchisee. To mitigate and balance the relationship requires application of a stricter law that requires dual acceptance of specific franchise contract standards. Specifically, the law needs to address the following two issues. First, there must be a legal interpretation of the dominant bargaining position. Second, there must be a clear description regarding violation of fair competition laws by the franchiser who makes a franchise agreement. This report considers the necessity of establishing such franchise laws to create contract standards for agreements between a franchisee and a franchiser. Consideration must be given to any precedents of the antitrust laws in franchise agreements. In addition, this report also considers the impact of mischief committed by part-time workers, namely, baito tero and the liability of such acts to the matters and parties of franchise agreements.