LEGAL AND BUSINESS ASPECT OF FRANCHISE AND FRANCHISE BUSINESS AND MEASURES DURING THE COVID - 19 PANDEMIC

Čović, Dragan and Čović, Ana and Petrović, Miloš (2021) LEGAL AND BUSINESS ASPECT OF FRANCHISE AND FRANCHISE BUSINESS AND MEASURES DURING THE COVID - 19 PANDEMIC. In: Economic and Social Development. Agency (VADEA), Belgrade, pp. 229-239.

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Abstract

Franchise is a business privilege defined by franchise law through which the franchisee operates, performs the franchise activity of selling certain products or performing defined services by the franchisor. The franchisee uses the trademark, the service mark of the franchisor, all based on his work and methods in the defined activity, use of franchise privilege. Based on the franchise agreement, the franchisee pays the franchisor a franchise fee. A franchise agreement is based on the principles of contract law, concluded with the consent of the will of the contracting parties and belongs to unnamed contracts and by its nature is a mixed contract, since it also contains elements of some other contracts. National and international regulations affect the protection of intellectual property rights and determine the content and manner of performing franchise activities. Franchising as a segment of entrepreneurship is a complex legal and economic business model, created between two independent economic entities. Franchise business can be viewed from several business aspects, such as: the manner and method of growth of economic entities that are geographically conquering new markets; enable growth of production and distribution capabilities of franchisors and recipients; form of new entrepreneurial activity of economic entities towards winning and starting a business activity with the creation of new jobs; the emergence of a new organizational form and a new form of restructuring in organizational terms with the beginning of new distribution channels and finding new sources of funding. At the same time, franchise business from the aspect of the theoretical concept gained its practical verification of business success through the operationalization of franchising as a way and method, "Know-how“, a concept that ensures the development and sustainable growth of the business entity in accepting franchising as a new opportunity in the economic development of the business entity. Also, today in these times of lockdown and closed stores and restaurants, franchisors and franchisees were and still are affected by the COVID-19 pandemic and requested to adapt their sales model, planning and implementation to the circumstances, because a whole franchise system has been challenged.

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