Thanks for the Memories : Compensating Franchisee Goodwill after Franchise Termination

Franchises serve as a potential avenue through which direct investment can be made into new markets. However, the current state of franchise law and related concepts such as the franchisor's or franchisee's goodwill are still underdeveloped. This Article reviews the franchise laws in key jurisdictions throughout the world. It considers, among other things, the treatment of goodwill upon termination of the franchisor-franchisee relationship. The Article argues for reforms, such as mandated pilot units prior to franchising. Most importantly, this Article proposes the adoption of a presumption favoring goodwill compensation for the franchisee. The presumption could be rebutted by express contract provisions and, certainly, by wrongful behavior on the part of the franchisee, but a clear default standard in favor of franchisees would lead to a fairer, more efficient approach to franchise networks and investments