THE ISSUE OF WHETHER THE PROVISION OF NON-COMPETITION CLAUSE IN THE AGREEMENT INFRINGES THE FRANCHISEE’S RIGHT OF COMPETITION

Abstract

In the modern circumstances of market operations, regardless of the form of franchising,
companies are subjects of contractual franchising. The obligation of the franchisee to apply
the business concept of the franchising network, when running its own franchising unit, is one
of the fundamental obligations. By limiting the business dispositive of the franchisee in such
a way that it is obliged to use and apply the business method, the franchisor is responsible
for its business success. The significance of the paper is that it indicates that the franchisee’s
business is successful: a) if it fully implements the business concept (business method) of
the franchisor, otherwise such business is doomed and b) if the franchisor provides it with
relevant information about the expected profit. Deviation from the sales forecast estimated by
the franchisor in the submitted pre-contractual information (disclosure information) and the
real profit that the franchisee achieves after starting an independent franchise business is the
basis for unilateral termination of the contract.