Survey of Recent Changes in Regulation of Franchising Arrangements

Franchising is extremely popular and franchised businesses have been a significant sector of the United States economy for some time. There are currently about one million franchise outlets in the United States which sell a variety of products and services.  Estimates put employment in the franchising industry—including franchised business, and business-format and product-distribution franchises—at over 20 million jobs, and it is believed that there are 1,500 different franchisors operating in the United States and more than 320,000 franchise retail outlets in the United States.  It has been estimated that the economic output from the franchise industry in the United States in 2005 was over $2.3 trillion. Franchising is also flourishing in foreign markets and recent estimates were that approximately 500 United States-based franchisors have been operating in excess of 40,000 franchised units outside of the United States in a wide array of foreign countries.  This week I’m passing along a report report on recent changes in the regulation of franchising arrangements on both the federal and state level that also includes a brief introduction to some of the key documents in the relationship between a franchisor and a franchise.  In addition, the report outlines franchise regulation outside of the United States.

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