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Franchisor Failure

In: Franchisees as Consumers

Author

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  • Jenny Buchan

    (University of New South Wales)

Abstract

Franchisor insolvency attracts increasing attention as the Global Financial Crisis rumbles on. It transpires that the law does not accommodate the franchisees’ interests in a neat or predictable way if its franchisor’s business fails. In this chapter, the concept of insolvency (administration followed by winding up) and the roles of the key players are explained. A case study of the failed REDgroup and its franchisor Angus & Robertson is presented, and some consequences of franchisor failure for franchisees are set out. This chapter also presents statistics on franchisor failure and identifies examples of strategic insolvency in the franchise context. International dimensions of franchisor insolvency and trademark issues are explored. The inability of ex ante measures, such as pre-contractual disclosure and the standard form franchise agreement to protect franchisees are addressed.

Suggested Citation

  • Jenny Buchan, 2013. "Franchisor Failure," Springer Books, in: Franchisees as Consumers, edition 127, chapter 0, pages 111-154, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4614-5614-8_8
    DOI: 10.1007/978-1-4614-5614-8_8
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