Are There Any Rules For Franchising?

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Indian law does not impose any rules and regulations on expansion through franchising in India. There is no specific legislation for the regulation of franchise in India but yes, allied legislation lays the muse for taking care of starting a franchise business in India. A close agreement abides both franchisors as well as the franchisee when there is a tight legal framework set by both the parties with their will and consent. It acts as a rulebook or a set of guidelines folder for both the parties.

However, there are no laid rules by the judiciary to set up an agreement in a particular format; it is the will and wish of both parties to formulate it in the way they desire to run their amalgamation in the business front.

Let us know if any rules are set on the segment of franchising in our country – India. 

Rules of franchising

There is also no restriction imposed on the franchisor whether he chooses FOCO or FOFO for his expansion platform, unlike foreign territories where everything is selected at the forefront of franchising idea.

The independence of doing franchise business in their way makes franchisors a touch skilled in terms of selecting their franchisees and evaluating the success rates afterward

This is because of the zero interference of the government or the law. Therefore, the sole accountability of performance lies on the shoulder of the franchisor or business owner.

Nevertheless, on the side, a franchisee needs rules to safeguard his interest as he has nothing on which he can rely upon once the business deal is done and the other party turns out to be a defaulter. Franchisee loses on this front. There is no looking back once you are inside it to commence what you were initially wanting. 

Franchising – The new era of business growth

Therefore, rules should be there to reduce this kind of damage not only for franchisees but for franchisors also in case if franchisees default in paying franchise fees and royalty.

The Indian law should come to the forefront with the set of rules and regulations that have their rule attached with the segment of franchising in India so that they can keep a check on the fair practices those issues in the business. It will help in providing a stage for a stable platform to perform business in the market with set rules and regulations that must be followed religiously by the budding franchise opportunities in the country. 

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