The Franchise Agreement in International Trade: its Advantages and Disadvantages

Abstract

The aim of the article is to analyze the implications of the franchise agreement in international trade. One of the contracts that is usually registered after the appearance and registration of property rights, and especially after the development of trademark rights, is the franchise agreement. A franchise agreement is a contract entered into between the franchisor and the franchisee as the owner of the intellectual property rights. In other words, the franchisee often uses trademark rights and intellectual property rights owned by the franchisor, which have a limited duration. It is concluded that, in franchise agreement, there is a right to enforce the franchisor's business method, which is implemented within the network (this method includes the use of intellectual property rights and know-how). This contract has detailed terms and is closely related to intellectual property rights and competition rights. The franchise must be distinguished from the distribution contract, the concessionaire, and the license. Under this agreement, the franchisee enters the franchise network and agrees to use the franchisor's method of negotiation and pay royalty-free payments instead.