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Journal cover: Management Decision

Management Decision

ISSN: 0025-1747
Incorporates: Journal of Management History (Archive)

Online from: 1967

Subject Area: Management Science/Management Studies

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Managing asymmetry in franchise contracts: transparency as the overriding rule

Document Information:
Title:Managing asymmetry in franchise contracts: transparency as the overriding rule
Author(s):Rosa Lapiedra, (Department of International Law, University of Valencia, Valencia, Spain), Felipe Palau, (Department of International Law, University of Valencia, Valencia, Spain), Isabel Reig, (Department of International Law, University of Valencia, Valencia, Spain)
Citation:Rosa Lapiedra, Felipe Palau, Isabel Reig, (2012) "Managing asymmetry in franchise contracts: transparency as the overriding rule", Management Decision, Vol. 50 Iss: 8, pp.1488 - 1499
Keywords:Contract law, Franchisee protection, Franchising, International franchise contracts, International management contracts, Obligatory pre-contractual information
Article type:Research paper
DOI:10.1108/00251741211262042 (Permanent URL)
Publisher:Emerald Group Publishing Limited

Purpose – The aim of this article is to provide solutions to protect the weaker party in management and distribution contracts, especially in the field of franchising.

Design/methodology/ approach – The paper is based on a review of literature, legislation and practices concerning management and franchise contracts. The regulation of this field at a national level consists of laws that are both private and mandatory in nature. Certain questions are raised concerning the obligatory nature of regulations when applied to the management of international franchise contracts.

Findings – This article studies the question of whether the imperative application of laws to international contract management is appropriate. These contracts are concluded through the form of adhesion contracts, which have been prewritten by the dominant party and by which the adherent, the distributor, the franchisee or the agent, are placed in a weaker legal position. Considering the absence of international tuitive rules, this article suggests a way to guarantee the protection of parties in a weaker position.

Practical implications – This research provides entrepreneurs, managers and other members of the business community with legal tools and mechanisms for the protection of the franchisee's position.

Originality/value – This approach may well be helpful in finding solutions to legal issues that are of great importance in the negotiation of service contracts, as a way to overcome the difficulty of finding solid arguments to extend the rules that protect consumers and workers in service agreements.

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