Navigating New Legal Demands For Franchisor Accountability

  • Carolyn Plump, Esq. LaSalle University
  • David J. Ketchen Auburn University
Keywords: franchising, franchise law, accountability, brand protection, transaction costs

Abstract

Franchising is a relationship wherein one organization (i.e., the franchisor) allows other organizations (i.e., franchisees) to use its brand name, products, and processes in exchange for fees. Because franchising offers franchisors the opportunity to build their brands quickly, it is perhaps not surprising that many firms rely on franchising as a key tool for organization design. One caution about franchising is that its use brings a complex array of legal issues into play. As franchising increases in popularity, so too does the scrutiny paid to this organizational form by the legal system. Indeed, the courts appear to be demanding increased accountability from franchisors. The goal of this Point of View article is to explain how organizations can avoid problems associated with increased accountability and even benefit from it.


Published
2014-08-01
How to Cite
Plump, Esq., C., & Ketchen, D. (2014). Navigating New Legal Demands For Franchisor Accountability. Journal of Organization Design, 3(2), 43-47. https://doi.org/10.7146/jod.16691
Section
Point of View Article