Outline about the law applicbale to Franchise transactions

Very informative. There's a lot involved in franchise transactions and a person or company has to be very careful when dealing in franchise deals.

Yes it is true that In India there is no particular specific law like foreign countries. Any foreign company can easily give franchise in India but if any Indian company will approach to give franchise in foreign country, it will difficult because very strict and high rules -regulation. Still in India, the concept is became aware and also grow slowly. However, person are facing high risks as well as difficulty after taking franchisee because many time franchisor are not giving proper support as per agreement.

Now a days at many place the "Franchise Exhibition" is organised as event. So, a person can create opportunity and establish business...

Informative Article. In small scale MOU based franchisees' are working in India everywhere. They even don't have much idea about law applicable on them. Disputes are always there. But the concept of franchise is very much appreciated. Aggressively Expansion without expenses.

INDIA IS HAVING HUGE POTENTIAL TO TRY ANY NEW CONCEPTS BUT THE QUESTION IS ALL ABOUT UNPREDICTABLE REACTION FROM VARIOUS QUARTERS. IF WE GO BY A FEW SUCCESS STORIES BASED ON CERTAIN METRO CITIES REACTIONS THEN THE STRATEGY NEEDS PERIODIC AND CONSTANT REVIEW. IF WALL MART IS GOING TO START OPENING SHOPS IN CITIES HAVING MORE THAN 10LAKS POPULATION THEN ITS SUCCESS STORIES CAN B DETERMINED. 

While agreeing to the views expressed by Sri Muralidharan and also the level of knowledge, I would say that India too provides good safe guards against anti-competition practices. We do have good laws and arrangements and the difficulty comes with the execution. For example, in US consumer laws are very affective and there is little political interference when it comes to dispute resolution mechanism like Courts. Contra, despite having good laws and mechanism, we could not address the deficiency issues effectively in India. When it comes to Patent laws, I do strongly feel that we do have good patent laws and we are signatories to international conventions in this regard as everybody know. When it comes to safe guarding our interests in international arena, it depends upon the effective functioning of our officials and concerned departments. Though the law says that the 'right is might', at times, we may have accept that the 'might becomes right'. For example, the United States is the proponant of Free Trade and Globalisation and everybody knows the role played by USA immediate to Second World War. But, they embrace protectionism now and that to unilaterally. It all ultimately depends upon the awareness and quality of people. 

With regard to Sri Makrand Bhave's comment on my article, I would like to say that the difinition for "Franchising" is inclusive in nature. I have just given an outline and what I wanted to emphasise is about the potential of Franchise type of arragements in India, the position abroad, and the legal complications when an agreement is entered into between a foreign company and an indian company. Going too deep into the issue and dealing with the relevant regulations abroad, requires a lenghthy write-up which I wanted to avoid. We can get lot of information about Franchising through Internet. My intention is just to expose my mind and I had the privilege of revising a book edited by a famous author where I have dealtwith Franchising issues.

Very informative article. Thanks for sharing. 

"A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor's trade name and usually with the franchisor's guidance, in exchange for a fee"... (investwords.com)

There is a very subtle difference in Product and Brand. Services are a completely different ball game altogether. I do not think that FRANCHISE would apply so well to RETAIL CHAIN per se, but if a brand decides to operate under its name complete with products and services then FRANCHISE laws would apply. Some brnads like DISNEY would enter into FRANCHISE agreement about the products to be sold in Indian environment/market under a franchise liscence awarded to a firm carefully selected by DISNEY. Similarly, CARTOON characters would be able to see themselves on the shelf of Indian stores if there is a company which has been selected / franchised to sell these characters on Indian shores through a selected company. SO if WALMART decided to lend its BRAND name to RELIANCE STORES, it would b a sort of frnachise because there is absolutely NO CONTROL over the products that are sold under the brand but the FORMAT has to be adhered to!!
Mr. Vanayam, this is such a helpful article! Your contribution is always been of great value to us on this platform. Would like to know a bit more in detail about the FRANCHISE and its applicable clauses!! Thanks a lot for the referral. :))

Recently we experienced the fall of Retail sector,  The shops opend with feverish pitch with so much fanfare suddenly closed 90% of them in the same pace. Do we have scope now for the Foriegn players to come? 

Nice article Mr. Durga Rao...really very informative. Thanks for sharing.

Under the circumstances, Retail Chains like Wal Mart may insist upon the applicability of US laws in case of disputes. This will prove to be quite expensive for the Indian franchisee. 

I have a few more doubts:- (i) As there is tremendous potential for big-ticket Privatization in India which includes FDI as well, due we have adequate safeguards against cartelization, small players getting crowded out , etc., The US has things like Competition Law and Anti-Trust Law in place. 

(ii) Has our Patent regime been strengthened adequately now to prevent what happened to products based on turmeric and Basmati rice?

Just how safe is the national wealth of citizens of this Country in the current context?