Franchising contract ? a modern juridical and economic instrument for business expansion

• Author: Adriana Florina Popa - Andreea Gabriela Ponorîca
• Position: Bucharest University of Economic Studies - Bucharest University of Economic Studies
• Pages: 31-43

Franchising contract – a modern juridical and economic instrument

for business expansion

Lecturer Ph.D. Adriana Florina POPA

1

Lecturer Ph.D. Andreea Gabriela PONORÎC2

Abstract

Development of trade, as well as its dynamics in the context of globalization, have

created the premises of acceleration in the commercial distribution networks expansion,

with immediate effects in the spher e of la w. Transgr ession, moreover, was predicta ble a nd

any legal implication in economics, as well that of the judiciary system i n the economy

can’t be ruled out. Among the commercial agreements, f ranchising has experienced one of

the most spectacula r developments of all kinds of business, due to the favorable context in

which it developed. In this paper we a im to analyze the essentia l elements of franchising,

based on the legal phenomenon rather than on the economic one. This ar ticle also

examines the behavior of existing and future entrepre neurs regar ding the possibility of

implementing this legal instrument. These r esults ar e consistent with the hypothesis t hat,

even if, according to the sta tistics, the fra nchise contract has successfully imposed itself in

the business world, there is enough reticence in adopting it as a development measure.

Keywords: contract, fra nchising, development, business, juridical instr ument.

JEL Classification: K12

Introduction

Franchising is an important and frequently studied form of organization. It

has been subject of various analysis articles in specialized periodicals, as well as of

synthesis papers. Nevertheless, we are far from the moment when we could say

that enough has been written in this regard.

Being thought as a system where independent entrepreneurs work together

inside a contractual network, franchising was born and has evolved in order to

become one of the main ways of having and running business nowadays.

The emergence of franchising was determined by the needs of distributing

the blockbuster released after the 50s of Twentieth Century by covering a wider

market without prejudicing the quality of the commercial offer. Even if the

franchise system met its peak in the realm of services, it is also applied in the

production field. Currently, development, diversification and specialization of this

economic phenomenon are in process, its usage spectrum being extended to

increasingly diversified areas.

Franchising is the most adapted kind of investment for the emerging

market nowadays, having the ability to introduce techniques, services and products,

while immobilizing the local capitals.

1 Adriana Florina Popa, Bucharest University of Economic Studies, adriana.fp@gmail.com

2 Andreea Gabriela Ponorîc, Bucharest University of Economic Studies, andreea.ase@gmail.com