Regulation Of Franchise Agreements In Ethiopia

Franchising is one of the fastest growing strategies for business expansion. A franchise is arnbinding contract between the franchisor and franchisee, in which the franchisor grants thernfranchisee the right to implement the former’s business system in exchange for the franchisee’srnpayment of fees and royalties. The complex interplay of numerous areas of law in the regulationrnof franchise agreements on one hand and the prevalent imbalance of information and bargainingrnpower between franchisors and franchisees on the other necessitated separate regulation ofrnfranchise agreements in many legal systems. In general, regulation of franchise agreements canrnbe done through franchise-specific laws (or regulation-based model), general rules ofrncommercial law (or private law-based model), industry self-regulation, or any combination ofrnthe three models. This research work intends to examine the regulation of franchise agreementsrnin Ethiopia. After needful analysis, the researcher concludes that the regulation of franchisernagreements in Ethiopia is inadequate, unthoughtful of the unique features of franchise businessrnrelationship and ineffective to give remedy to practical and potential problems. Thus, thernresearcher mainly recommends the enactment of comprehensive franchise-specific law.

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