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Vol 11 (2013) - Issue 4

Canada – Legislative and case law developments

Larry Weinberg, Cassels Brock & Blackwell LLP, Toronto, Ontario, Canada

Over the past year or so, there has been continuing judicial and legislative activity which has greatly impacted franchise law in Canada. This article discusses some of the key legal developments of 2012, and the beginning of 2013, including the Province of Manitoba’s new franchise legislation, a recent proposal for franchise legislation in the Province of British Columbia, the two most significant Canadian franchise law cases during this period, and the rise of franchise class actions.

Denmark – Recent developments in franchising

Lasse Arffmann Søndergaard Christensen and Søren Høgh Thomsen, Gorrissen Federspiel, Copenhagen, Denmark

Recent developments in franchising in Denmark are significant mostly from a commercial perspective. Even though the Danish economy has been consistently considered fundamentally stable and robust during the recent crisis, the new economic reality has had an impact on the franchising sector in Denmark. This article describes and analyses recent legislative and case law developments which affect franchising, in particular a new injunction regime, amendments to the competition law and the liability of franchisors for financial projections.

Franchise regulation in Tunisia

Bachir Mihoubi, FranCounsel Group, LLC, Atlanta, Georgia, U.S.A.

Following enactment of a law in 2009 specifically allowing franchise transactions, Tunisia adopted an implementing decree in 2013. The regulation sets out the scope of the disclosure obligations of the franchisor and prescribes certain mandatory elements each franchise agreement must contain. This article analyses the provisions of the law and regulation, and considers their impact on the development of franchising in the fast developing Tunisian market.

Franchising in South Africa

André Visser, Adams & Adams, Pretoria, RSA

The Consumer Protection Act and implementing Regulations set out a number of formality and disclosure requirements applicable to all franchise agreements entered into in South Africa. This article analyses these provisions in relation to franchise agreements and disclosure documents in detail and considers the problematic start to the enforcement activities of the National Consumer Commission and National Consumer Tribunal.

Non-compete covenants

John H Pratt, Hamilton Pratt, Warwick, United Kingdom

Franchisors rely on effective non-compete covenants to maintain the integrity of their franchise system. Most UK franchisors seek to comply with the European Union block exemption for vertical agreements so that their franchise agreements do not fall foul of competition rules. This article discusses recent case law which suggests that these restrictive covenants do not in fact comply with the block exemption, causing considerable uncertainty for franchisors

United States - Are your master franchisee and its franchisees your employees?

Jenine E. Hinkle, Greenberg Traurig LLP, Chicago, United States

In recent years there has been an increase in the number of franchise-related disputes challenging a franchisee’s status as an independent contractor in the case of claims by a franchisee or third party against a franchisor. This article analyses how US courts have assessed the franchisor-franchisee relationship on the basis of statute and common law, in particular in the context of master franchise systems. The author concludes that recent case law has opened the door to vicarious liability claims by subfranchisees against master franchisors.