This research program aimed to examine and assess the impact of the European legislation on practices, conflicts and performance linked to the use of Internet (transactional websites and social networks) within franchise networks, using a multidisciplinary (Business, Law and Economics) and a European approach (France, Germany, Spain and the UK).
In fact, franchising is “a contractual agreement between two legally independent firms in which one firm, the franchisee, pays the other firm, the franchisor, for the right to sell the franchisor’s product and/or the right to use its trademarks and business format in a given location for a specified period of time” (Blair and Lafontaine, 2005, p. 3).
Franchising has been growing for the last 30 years. There are more than 2.5 million franchised units worldwide (European Franchise Federation, 2010). For instance, in the United States, there are more than 2,200 networks, including 746,828 franchised stores, responsible for 8,100,000 jobs and generating U.S.D. 769 billion in revenue (PricewaterhouseCoopers, 2012). In Europe as well, franchising is particularly developed with about 400,000 franchised units. In France for example, there are 1,569 franchisors and 62,041 franchised units with 49.24 billion euros of turnover (French Franchise Federation, 2012). All these figures highlight the importance of franchising in terms of economy and employment.
As the number of franchise networks has been constantly increasing, the number of franchisor/franchisee and franchisee/franchisee conflicts has been increasing as well, whatever the industry (retailing and services) and whatever the country (e.g., Frazer and Winzar, 2005). Indeed, franchisors and franchisees are both entrepreneurs who work under a same brand. They want to achieve a higher performance, but their objectives (e.g., in terms of the use of Internet: communication vs. sales; global vs. local, etc.) and means can vary and conflicts can then emerge.
We considered that the European legislation could influence the practices of franchisors and franchisees; the sources, scope, types and modes of resolution of conflicts; as well as the performance of the franchise networks. We focused on the use of Internet that is currently a key element of franchising particularly concerned by the European legislation (the guidelines on vertical restraints (2010/C 130/01) of the European regulation No 330/2010 of April 2010, the European directives and the opinion of the French Competition Authority N° 12-A-20 of 18 September 2012, etc.).
It consisted in studying the use of Internet by franchisors and franchisees, at the level of the set up and management of transactional websites and at the level of the presence of the brand on social networks such as Facebook, LinkedIn, Twitter, along with all the consequences in terms of management of exclusive territories, brand image and network uniformity, encroachment, good faith, know-how, etc.
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