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How to Resolve Franchisor-Franchisee Conflict Legally

India does not have any specific laws on franchising. A broad definition of transfer of technology covers franchising. Thus, the legal framework for new franchisers interested in setting up master franchises in India exists in terms of brand protection and rules regarding payment of franchise fees. When franchisors enter India, they are governed by a number of different national and regional statutes and codes rather than a single comprehensive statute. Here are few laws that help resolve conflicts between franchisors and franchisees: (BBGV1462021)

1. Contract Act-

By nature, every franchising relationship is bound by a contract, hence the Indian Contract Act, 1872 is applicable to all franchising arrangements. Under the Contract Act, a “contract” is an agreement enforceable by law. Most conflicts relating to the act are as a result of ‘Restraint of trade;’ when franchisees are restricted from entering into a contract with another franchisor.

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