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What are, as a general rule, the issues that are the subject of litigation in the franchisor-franchise relationship? In the 1850s, Singer Company implemented a franchise plan for the distribution of its sewing machines. However, the company failed because the company did not make much money, although the machines sold well. Traders, who held exclusive rights to their territories, recorded the bulk of the profits as a result of the deep discounts. Some failed to push Singer products, allowing competitors to sell the company. Under the existing contract, Singer was unable to withdraw the franchisees` rights or send its own representatives. Then the company began to buy back the rights sold. The experiment proved to be a failure. It may have been one of the first times a franchisor failed, but it was far from the last. (Even Colonel Sanders failed to support his franchising efforts in Kentucky Fried Chicken.) However, the Singer project did not end franchising. Franchising is a sui generis contract that bears the characteristics of several explicitly regulated contracts, such as the . B; Agency, sales contract, etc. The provisions relating to such contracts in the Turkish Code of Trade and in Turkish Bond Law apply to franchising.
Franchising is described in teaching and has several essential elements such as; the franchisee`s independence from the franchisor, the use of know-how and consistency of products and services, the standard use of the brand and logo, the payment of a royalty, increased sales by the franchisee and continuity. Franchising can be done for a specified or indeterminate period. The indeterminate can only be annulled by a reasonable period of time or for a just reason. The franchise agreement with a certain period expires at the end of the period, unless otherwise stated in the agreement. However, a termination on the grounds is also provided for franchising agreements with a specified period. A franchise is a type of license that allows a franchisee to access a franchisor`s own business knowledge, processes and brands, so that the franchisee can sell a product or service under the franchisee`s company name. In return for the acquisition of a franchise, the franchisee generally pays the franchisor an initial rental premium and annual royalties. When the franchisor files claims on the actual or probable sales of its franchises or on their actual or potential profits, the facts must be provided to support these statements. Right to Competition While a franchise may be exclusive, exclusivity is not a necessary element. Non-exclusive deductibles – including those that operate or act as a public company – do not imply the right to be free from competition.
The granting of such a franchise does not imply the granting of a similar franchise to another body or legitimate competition from the public authorities.