Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Law Consultation Paper 2007 279
exercise fairness in their dealings with each other and lists essential terms that a
franchise agreement must cover. 195
Work has also been underway on a model European Civil Code, which
would include measures to regulate franchising. The Study Group on a European
Civil Code, a network of academics from across the EU, aims to produce
principles for private law rules to apply across Europe. A draft chapter on
franchising contains pre-contractual disclosure provisions, as well as a number of
provisions to regulate the franchise relationship throughout the term of the
agreement. 196
D. UNIDROIT
The International Institute for the Unification of Private Law (“UNIDROIT”) is
an independent intergovernmental organization of 60 Member States instituted
to “study needs and methods for modernising, harmonising and co-ordinating
private and, in particular, commercial law as between States and groups of
States”. 197
In 1985, the Canadian member of the Governing Council of UNIDROIT
proposed that the organization consider the preparation of uniform rules on
franchising. 198 At that time, franchising was a new development in Europe and
was rare in other countries, with the exception of North America. However,
franchisors’ representatives opposed the concept of an international instrument,
195
See European Franchise Federation, European Code of Ethics for Franchising, online:
(date accessed: May 12, 2007).
196
“An Uncivil Code” F#: FFW’s International Franchise Update, supra note 50. Draft
relationship provisions include requirements imposed on the franchisor to provide ongoing
assistance necessary to operate the business without charge, make reasonable efforts to promote
and maintain the reputation of the franchise network and provide the franchisee ongoing
information about matters such as market conditions and advertising campaigns. Franchisee
obligations include the requirement to make reasonable efforts to operate the business
according to the franchisor’s business method, follow reasonable instructions, take reasonable
care not to harm the network and allow reasonable access to the franchisor for checks and
audits.
197
UNIDROIT, About Unidroit, online:
(date accessed: May 12, 2007). It
was first established in 1926 as an auxiliary of the League of Nations, and re-established in 1940
by multilateral agreement between 60 member States.
198
UNIDROIT, Model Franchise Disclosure Law, September 2002, online:
(date
accessed: May 12, 2007). The Explanatory Report notes that there had been “a number of
instances of sharp practices within Canada that it was feared might spread also to other
countries with the international expansion of franchising,” at 11.