Scribd Logo
Unggah

Selamat datang di Scribd!

  • Ranchising:: Eliminating by Applying

    Diunggah oleh

    Hirantha Imesh de Silva
    16 tayangan12 halaman
    This document discusses agency costs in franchising relationships and how applying fiduciary duties can help eliminate them. It defines a franchise as a contract giving a franchisee the right to use a franchisor's brand and operating methods. Agency costs arise when franchisees may not act in the franchisor's best interests and instead pursue their own. Fiduciary duties are identified as a legal obligation for one party to act in another's best interests. The document argues that fiduciary duties can fill contractual gaps, reduce franchisee deviations from agreements, and be an economically efficient way for franchisors to reduce agency costs beyond other monitoring methods. It concludes that fiduciary duties should be used preventatively rather than just to address issues after

    Deskripsi Asli:

    sdfksmflsdmfklsfsdsdfdsf

    Judul Asli

    A 10 LLB 003

    Hak Cipta

    © © All Rights Reserved

    Format Tersedia

    PPT, PDF, TXT atau baca online dari Scribd

    Apakah menurut Anda dokumen ini bermanfaat?

    Apakah konten ini tidak pantas?

    Laporkan Dokumen Ini
    This document discusses agency costs in franchising relationships and how applying fiduciary duties can help eliminate them. It defines a franchise as a contract giving a franchisee the right to use a franchisor's brand and operating methods. Agency costs arise when franchisees may not act in the franchisor's best interests and instead pursue their own. Fiduciary duties are identified as a legal obligation for one party to act in another's best interests. The document argues that fiduciary duties can fill contractual gaps, reduce franchisee deviations from agreements, and be an economically efficient way for franchisors to reduce agency costs beyond other monitoring methods. It concludes that fiduciary duties should be used preventatively rather than just to address issues after

    Hak Cipta:

    © All Rights Reserved
    Unduh sebagai PPT, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    16 tayangan12 halaman

    Ranchising:: Eliminating by Applying

    Diunggah oleh

    Hirantha Imesh de Silva
    This document discusses agency costs in franchising relationships and how applying fiduciary duties can help eliminate them. It defines a franchise as a contract giving a franchisee the right to use a franchisor's brand and operating methods. Agency costs arise when franchisees may not act in the franchisor's best interests and instead pursue their own. Fiduciary duties are identified as a legal obligation for one party to act in another's best interests. The document argues that fiduciary duties can fill contractual gaps, reduce franchisee deviations from agreements, and be an economically efficient way for franchisors to reduce agency costs beyond other monitoring methods. It concludes that fiduciary duties should be used preventatively rather than just to address issues after

    Hak Cipta:

    © All Rights Reserved
    Unduh sebagai PPT, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 12

    Hirantha Imesh de Silva

    A/10/LLB/003
    LAW 403

    Franchising : Eliminating Agency Cost


    by Applying Fiduciary Duties

    FRANCHISE
    Contract between two legally independent parties
    which gives a person or group of people
    (franchisee) the right to market a product or
    service using the trademark or trade name
    (branding) of another business (franchisor);
    The Franchisee the right to market a product or
    service using the operating methods of the
    Franchisor (use of the System -know-how);
    the Franchisor the obligation to provide rights and
    support to Franchisees

    Owns (or has the right to use the)


    trademark or trade name

    Uses trademark or trade name


    Uses the System

    Exercises continuing control


    Provides support

    Expands business with


    franchisor's support

    Receives fees

    Pays fees

    AGENCY COST
    General View
    The sum of monitoring expenses by the principals; bonding
    expenditures of the agent and residual loss from
    uncontrollable deviation of the agent from his promise
    Agency Cost in Franchise
    Franchisees may not work as to forward the franchisors
    interests as the franchisor would, or worse, franchisees
    may pursue their own interests at the franchisors expense.
    Hence to monitor franchisors have to bear a cost

    Modes of Eliminating Agency


    Cost
    Gathering Information
    Paying Incentives
    Monitoring
    Restricting powers
    Fiduciary Duties to Eliminatee Agency
    Cost

    Fiduciary Duty
    Fiduciary duty is identified as a legal obligation of
    one party to
    act in the best interest of another.

    Agency has often been


    described as
    fiduciary relation
    McKenzie v McDonald [1927] VLR 134
    Pedersen v Larcombe [2008] NSWSC 1362
    Beach Petroleum NL v Abbott Tout Russell Kennedy (1999)
    33 ACSR 1

    Effect of Fiduciary Duty


    Fills contractual gaps

    Reduces deviances

    Conclusions
    Fiduciary duties could be used as an
    umbrella to reduce agency cost.
    It is economic for the franchisor apart from
    the other modes to reduce agency cost.
    Non-compliance with fiduciary duties have
    both legal and non legal drawbacks.
    This should be used as a mode of
    prevention rather than a mode to redress.

    Bibliography
    Sitkoff, Robert.H. An Economic Theory of
    Agency Law. 2014.
    Rodrick, Munday. Agency law and
    Principles.2010.
    Kaufmann, Patrick.,Dant, Rajiv. Franchising:
    Contemporary Issues and Research.New York:
    The Hawoth Press Inc. 1995.

    Anda mungkin juga menyukai