Do you agree that a franchise relationship should under certain circumstances be treated
Do you agree that a franchise relationship should under certain circumstances be treated as an agency relationship? Explain.
The answer is explained below;
I don't agree because each has its own terms. For example the former pays a fee for the use of the franchise formula to the franchisor while the latter is entitled to the commission only. Another thing is that in the former, franchisors supervise the way in which franchisees carry out their business whereas the latter is not supervised by the principal, the only thing they do is to look at the results. When it comes to whose expense at risk the franchisee acts in his own name and at his own risk, whereas the commercial agent acts in the name of the principal and, in principle, also at the risk of the principal .Finally there is strict distinction where franchisee typically runs a business at his own risk and expense whereas on the other the agent does not act for his own account and risk.
Mitzsheva, M, (2021). Difference Between a Franchise & a Distribution Agreement. Retrieved on 13th August 2021 from, https://smallbusiness.chron.com/difference-between-franchise-distribution-agreement-41153.html
No .Because the terms in the two contract are totally different.