Although there is no "typical" franchise contract, the franchise purchaser, or franchisee, is usually required to pay a fee for the privilege of opening a franchise outlet, and must then rely upon the franchise seller, the franchisor, to provide guidance and support in the operation of the enterprise. If the venture fails, the franchisee may lose his entire investment. In the past, there have been attempts to regulate substantive provisions of franchise agreements in order to reduce the instances of investment loss by franchisees. The focus of recent concern over franchising practices has not involved the objection to particular contract provisions so much as the desire to insure that the investing franchisee is aware of the true nature and scope of the risks he is undertaking. This Comment will trace the extent of regulatory practices, with particular emphasis placed upon recent state and federal legislative proposals that require full disclosure of material information by the franchisor prior to any contractual undertaking with a prospective franchisee.
Terry D. Sattler,
Franchise Full Disclosure,
50 Neb. L. Rev. 526
Available at: http://digitalcommons.unl.edu/nlr/vol50/iss3/6