An Exploration of the Legal Meaning of Franchising

There is no one settled definition of franchising. Its meaning is interpreted differently depending on discipline, jurisdiction, and the particular application or structure of the franchise arrangement in any given context. This article surveys the elements of statutory definitions of franchising in the law of jurisdictions that have enacted franchise-specific legislation, and it interprets these elements with a focus on the ways in which they reflect the quality of franchisee reliance upon and vulnerability to the franchisor's business, system, management, policies, and operations. This dependency of a franchisee's business upon that of its franchisor is idiosyncratic to franchising, and, along with related issues of alignment of interests, is well documented in the academic literature. Existing statutory definitions, however, may fail to adequately capture this essential element, with the risk that legislation may fall short of accurately and fully addressing this aspect of the relationship.