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Vol 3 (2005) - Issue 2

Franchising in Slovakia

Luboš Frolkovič, Partner, Wolf Theiss, Bratislava and Pavol Biksadský, Associate, Wolf Theiss, Bratislava

Whilst there are no franchise-specific regulations in Slovakia, the expansion of franchising as a form of doing business has led to the implementation of a new type of contract: the franchise agreement. The authors set out the legal background and all key requirements that need to be considered.

Franchising in Australia – e-commerce and data protection issues

Penny Ward, Tushar Roy and Allison Manvell, Baker & McKenzie, Sydney

Franchisors conducting business online should carefully consider the legal ramifications of using the internet as a business communications, sales and marketing tool. This question and answer format in this article is intended to focus on issues of particular interest to franchisors, while recognising that many of the issues have a much wider application than the franchise sector.

China: New franchising law

Dr Martin Mendelsohn

On 1 February 2005 in China the Measures for the Management (Regulation) of Commercial Franchises entered into force. This article summarises the main provisions.

E-commerce and data protection issues and their impact on franchising under German law

Dr. Gregor Zeifang, CMS Hasche Sigle, Stuttgart

E-commerce law and data protection law are areas with a very wide scope of application. Nearly every modern business model is affected by these laws and has to comply with their requirements – and franchising is no exception. For example, the franchisor or the franchisee can operate a website on the internet, the franchisee can provide his goods or services via the internet and franchisor and franchisee normally collect and transfer personal data, eg of customers. In all these cases, e-commerce law or data protection law have to be taken into consideration and can have an impact on the franchisor’s and franchisee’s business. In this article, some of the most important issues concerning e-commerce law and data protection law in the context of franchising will be illuminated under German law.

Argentina’s new draft legislation on franchising

Osvaldo Marzorati, Allende & Brea, Buenos Aires

Argentina’s new franchising legislation came about as a direct result of a decision of its Supreme Court which ignored an earlier ruling which declared that the joint liability established by labour law between a company and a subcontractor performing the main activity of the company was not applicable to the franchisor. This led the Argentine Franchise Association to sponsor the legislation described below.

Argentine business franchise agreement

Osvaldo Marzorati, Allende & Brea, Buenos Aires

A translation of the standard Argentibe business franchise agreement.

Proposed disclosure law in Sweden

Anders Fernlund, Delphi & Co, Stockholm

A government survey in Sweden was set up in 2004 up to investigate whether the Unidroit Model Law should be incorporated into a new Franchising Bill. The report concluded that there was no need to incorporate the Unidroit Model Law into Swedish law but that an existing law entitled ‘the law regarding contractual terms between legal entities’ should be amended. A new definition of franchise agreements is proposed, even though there is a definition in the Swedish version of the European Block Exemption Regulation – a move opposed by the Swedish Franchising Association.

EU Report April 2005

James Webber, Eversheds LLP, Brussels

This month’s EU Report looks at the amendments put forward in a EU Report to the proposed Services Directive and their impact on franchisors. It also considers the Advocate General’s Opinion in an important case concerning the ability of firms to off set losses incurred abroad but in the EU, against profits generated in their home Member State.

Lost profits awarded for wrongful termination of distributor

Michael G. Brennan and Lauren J. Murov, DLA Piper Rudnick Gray Cary LLP, Chicago

In the recent case of Wash Solutions, Inc. v. PDQ Manufacturing, Inc. the United States Court of Appeals for the Eighth Circuit affirmed a jury’s award of lost future profits for (1) PDQ Manufacturing, Inc.’s (‘PDQ’) violation of the Missouri Franchise Act’s (the ‘Act’) notice of termination requirement and (2) PDQ’s breach of the exclusive distributorship agreement with Wash Solutions, Inc. (‘Wash’), but vacated the jury’s award of $330,000 in favour of Wash for PDQ’s alleged tortious interference with Wash’s business expectancy and, in accordance therewith, it also vacated the jury’s $125,000 punitive damages award based on that claim.