Conditions for effective disclosure in the regulation of franchising

Elizabeth C. Spencer

Research output: Contribution to journalArticleResearchpeer-review

11 Citations (Scopus)

Abstract

This paper outlines the use of disclosure in the regulation of the franchise sector in Australia, demonstrating that it does not meet conditions considered necessary for effective informational regulation. First, there is not enough reliable information to gauge the risks in informing the design of regulatory process and the choice of tools; second, the information in the disclosure document is not uniformly reliable, accessible and useable; and, third, a franchisee's ability to act on the information is limited because the franchise contract is not subject to negotiation and there are limited alternatives in the market. As potential solutions, this paper proposes that increased cooperation among and fuller representation of stakeholders, better information from dispute resolution processes, and registration of disclosure would improve the level of information about the sector generally. To ensure reliable, accessible and useable information, the information that is required to be disclosed should be identified by all stakeholders, with assurance that it is provided in an accessible, useable way. Finally, educational initiatives are needed to enhance franchisees' ability to act on the information. This paper also briefly surveys some other regulatory tools used in the regulation of franchising, but urges that these tools be selected as part of a democratic and participative regulatory process that accurately represents the interests of all stakeholders.

Original languageEnglish
Pages (from-to)509-525
Number of pages17
JournalInternational Review of Applied Economics
Volume22
Issue number4
DOIs
Publication statusPublished - Jul 2008

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franchising
regulation
stakeholder
level of information
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Disclosure
Franchising
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market

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Conditions for effective disclosure in the regulation of franchising. / Spencer, Elizabeth C.

In: International Review of Applied Economics, Vol. 22, No. 4, 07.2008, p. 509-525.

Research output: Contribution to journalArticleResearchpeer-review

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