Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Legislation and Associations Around the World 357
franchising companies. However, the WFC will only recognize one national
franchise association per member nation, with the exception of Hong Kong. 20
The purpose of the WFC is the encouragement of international
understanding and co-operation in the protection and promotion of franchising
worldwide. Its objectives are fourfold: (i) to provide a forum within which each
properly constituted National Franchise Association in the world can take an
equal seat in the confidence that its views and its sovereignty will be respected
and in the expectation that their common interests and needs will be supported
internationally; (ii) to determine those aspects of information on, and experience
of, franchising which can be usually shared internationally and to provide
mechanisms for the efficient communication of that “know-how;” (iii) to
represent international information on franchising and the common views of
National Franchise Associations to international bodies; and (iv) to encourage
the development of properly constituted National Franchise Associations in all
countries around the world, as recognized by the United Nations. 21
The WFC adheres to a series of principles of ethics that apply to the
relationship between franchisor and franchisee, as well as to the relationship
between master-franchisee and sub-franchisee. The WFC requires that its
franchisor members disclose to prospective franchisees all the information
necessary for the franchisee to engage himself in the franchise relationship in full
knowledge of his commitments and responsibilities. This information must be
disclosed within a reasonable delay before signing the contract, delay which
cannot be less than seven days. Furthermore, during the negotiation phase, a
franchisor may ask the prospective franchisee to sign a legally binding statement
of confidentiality. 22 The WFC also regulates duties of the franchisee and
franchisor.
A franchisee cannot compete with the network, in particular by
appropriating or diverting the know-how transmitted by the franchisor.
Furthermore, the franchisee has a duty of confidentiality during and after the
franchise contract. A franchisor must develop and maintain the commercial and
technical know-how that supports the franchise network and favours a
permanent and structured dialogue with the franchisees to aid the protection
20
Ibid.
21
World Franchise Council, “World Franchise Council Constitution,” online: About WFC –
Constitution
.
22
World Franchise Council, “The World Franchise Council’s Principle of Ethics,” online: about
WFC – Internal Rules
.