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Enforcing System Standards When Franchisees Have Long-Term Contracts
A franchisor's ability to enforce system standards and sustain the positive image of the brand is critical to the long-term success of a franchising system. To some degree, a franchisor's threat of termination or non-renewal contributes to that enforcement effect. But what can a franchisor do when a contract has a long duration and/or a franchisee has a strong legal presumption of renewal?
Two professors at the University of Munster (Munster, Germany) found significant modifications in a franchise's governance structure, as defined by its contract with franchisees, when a franchisor's capacity to threaten termination or non-renewal is significantly limited. The findings of Profs. Oliver Cochet and Thomas Ehrmann were presented in a paper at the 19th Annual Conference of the Inter-national Society of Franchising last year, “The Effectiveness of Con-tractual Self-Enforcement and Implications for the Governance Structure of Franchising Firms.”
By reviewing German franchise contracts, using data from the German Franchising Association and the Yearbook Franchise and Cooperation 2005, a comprehensive database of franchises operating in Germany, the professors found that franchisors typically make two key adjustments when their termination rights are constrained. First, they increase the share of company-owned outlets, and second, they use the franchising contract to centralize decision-making authority in their hands. The first adjustment gives franchisors greater knowledge about how their outlets are operating in the real world, and the second adjustment gives franchisors the ability to control franchisees based on that knowledge.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?