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Franchisees’ Resale Price Policy Facing Legal, Contractual and Professional Constraints: Insights from European and French Perspectives

Guy Basset, Rozenn Perrigot

Economic and Legal Issues in Competition, Intellectual Property, Bankruptcy, and the Cost of Raising Children

ISBN: 978-1-78560-563-5, eISBN: 978-1-78560-562-8

Publication date: 23 November 2015

Abstract

Purpose

The subject of resale pricing is a hot topic in franchising, due to its links with chain homogeneity and franchisee autonomy. The franchisee is bound by current legislation and regulations, in addition to respecting the franchise contract clauses, to the extent that they are lawful, and potentially opposing contentious professional practices. Focusing on resale prices, we cover these three perspectives, that is, legal, contractual, and professional constraints, using a dual approach based on managerial and legal perspectives and illustrating our arguments using examples from European and French cases.

Methodology/approach

We illustrate our arguments using examples from European and French cases.

Findings

We pointed out that the ban on the practice of imposed resale prices presents several advantages (e.g., integrity of franchise chains, chain’s commercial dynamism).

Research limitations/implications

Our paper contributes to the stream of franchising literature dealing with resale prices.

Practical implications

Our paper can be viewed by franchisors, franchise experts, franchisees, and franchisee candidates as a synthesis of the impact of European and French regulations on resale price-based practices to be adopted in franchise chains. It also highlights practices to be avoided in order to prevent potential conflicts.

Originality/value

We use a dual approach based on managerial and legal perspectives to explore resale prices in the context of franchising.

Keywords

Acknowledgements

Acknowledgments

The authors thank the French National Research Agency (references: FRANBLE – ANR-12-BSH1-0011-01), as well as the Center in Franchising, Retail & Service Chains for their valuable support. They also thank Laure Desclèves for her assistance in the jurisprudence review.

Citation

Basset, G. and Perrigot, R. (2015), "Franchisees’ Resale Price Policy Facing Legal, Contractual and Professional Constraints: Insights from European and French Perspectives", Economic and Legal Issues in Competition, Intellectual Property, Bankruptcy, and the Cost of Raising Children (Research in Law and Economics, Vol. 27), Emerald Group Publishing Limited, Leeds, pp. 119-142. https://doi.org/10.1108/S0193-589520150000027009

Publisher

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Emerald Group Publishing Limited