Franchisees’ Resale Price Policy Facing Legal, Contractual and Professional Constraints: Insights from European and French Perspectives
Résumé
Purpose
The subject of resale pricing is a hot topic in franchising, due to its links with chain homogeneity and franchisee autonomy. The franchisee is bound by current legislation and regulations, in addition to respecting the franchise contract clauses, to the extent that they are lawful, and potentially opposing contentious professional practices. Focusing on resale prices, we cover these three perspectives, that is, legal, contractual, and professional constraints, using a dual approach based on managerial and legal perspectives and illustrating our arguments using examples from European and French cases.
Methodology/approach
We illustrate our arguments using examples from European and French cases.
Findings
We pointed out that the ban on the practice of imposed resale prices presents several advantages (e.g., integrity of franchise chains, chain’s commercial dynamism).
Research limitations/implications
Our paper contributes to the stream of franchising literature dealing with resale prices.
Practical implications
Our paper can be viewed by franchisors, franchise experts, franchisees, and franchisee candidates as a synthesis of the impact of European and French regulations on resale price-based practices to be adopted in franchise chains. It also highlights practices to be avoided in order to prevent potential conflicts.
Originality/value
We use a dual approach based on managerial and legal perspectives to explore resale prices in the context of franchising.