Underneath the Golden Boy - Robson Hall Faculty of Law

280 Underneath the Golden Boy
and UNIDROIT agreed to monitor franchising developments. 199 Over time,
interest in the development of an international franchise instrument grew, and
in 1993 UNIDROIT established a Study Group on Franchising. 200 The new
interest “was largely due to the increased attention devoted to franchising by
legislators and the consequent proliferation of franchise laws, not all of which
had, in the view of the members of the Study Group, given sufficient
consideration to the specific nature and characteristics of franchising, thereby
unintentionally putting the future development of franchising in the country
concerned at risk”. 201
The Franchising Study Group prepared a Guide to International Master
Franchise Arrangements, 202 published in February 1998, and a Model Franchise
Disclosure Law, 203 submitted to the Governing Council in September 2002.
The UNIDROIT Model Law deals only with the disclosure obligations of
franchisors; it does not address the relationship between the parties. 204 The
Group considered approaches that included relationship provisions, such as “for
example, whether the franchisee has a statutory right to renew the agreement,
and whether the franchisee has a right to cure when he/she breaches the
contract”, 205 noting that the additional requirement for registration in some
jurisdictions “considerably increased the burden that was placed on the
franchisor”. 206 However, the Group concluded that the experience of States with
relationship legislation had been negative, and that while it was feasible to reach
agreement on disclosure provisions, and therefore to attain a degree of
uniformity, “it was far more problematic to devise common norms for
relationship issues in view of the great variety of relationships that existed within
the context of franchising”. 207 As a result, the Group concluded that regulation
at the international level should deal only with disclosure.
Under the Model Law, a franchisor must give a prospective franchisee a
disclosure document at least 14 days before the signing of any agreement or the
payment of a non-refundable deposit, other than a confidentiality agreement or a
199
Ibid. at 11-12.
200
Ibid. at 12.
201
Ibid. at 14.
202
UNIDROIT, Guide to International Master Franchise Arrangements (1998).
203
UNIDROIT, supra note 54.
204
Ibid.
205
Ibid, at 14. The relationship provisions identified by the Group are more far-reaching than
those included to date in Canadian franchise statutes.
206
Ibid.
207
Ibid. at 3-4.