6533b838fe1ef96bd12a3a24

RESEARCH PRODUCT

Exploring the Anatomy of Franchising: A Cross-National Examination of US and Finnish Franchise Contract Provisions

subject

description

The present study focuses on describing and comparing the provisions of the franchise contracts and pre-sale disclosures to prospective franchisees in the USA and Finland. A fact that makes the investigation especially interesting is that no franchising specific legislation exists in Finland. Whereas in the USA franchisors are by a directive of the Federal Trade Commission required to publicly disclose key information on their franchise systems. The information is of paramount importance for potential franchisees who need to analyze franchise offering(s) before their buying decision. Two separate samples were developed for the study. The member franchisors of the International Franchise Association and franchisors listed in Entrepreneur Magazine’s “Franchise 500” were sampled for the US data and in Finland the member franchisors of the Finnish Franchising Association were surveyed. The obtained data sets from the two countries were combined and then analyzed statistically to reveal differences and similarities between franchise contract characteristics. It was found that significant differences in franchise contract provisions occur and they have concrete consequences on franchisees’ business operations.