The Franchise Agreement Termination With Justified Reasons

Abstract

Nowadays, developing commercial life has led companies to develop new methods to enter new markets and meet the expectations of consumers. One of these methods is the franchise system. The system first became popular in the United Kingdom and then in the US and other countries. Franchise agreements generally do not have a legal regulation in the countries where this system is applied. The contracts between the parties form the legal relationship. Within the framework of this relationship, franchisee takes advantage of the brand's recognition, competitiveness, marketing and advertising advantages. The franchiser has the opportunity to transport the product of the same standard to a wider marketing network with low cost and speed. Franchise agreement creates a continuous obligation relationship between the parties. Therefore, the emergence of justified reasons may result in the termination of the contract. The parties may have arranged the reasons for the termination of the agreement between them. Even if no arrangement is made, the nature of the relationship may justify the reason for such an end. Because the franchise agreement establishes a relationship of trust between the parties and the damage of this relationship may make the contract irresistible. In our study, first of all, general information about the legal nature of the contract and the rights and obligations of the parties is given. Then, the conditions for the termination of the justification were evaluated and it was discussed how the situations could lead to this.