The Legal Challenges of Franchising in Pakistan’s Commercial Sector
https://doi.org/10.5281/zenodo.17404200
Abstract
Franchising has become one of the vibrant business models in Pakistani developing commercial environment and this provides growth opportunities to foreign and local business entrepreneurs. Nevertheless, the legal framework that is involved in franchising is still immature and disjointed. Although some elements of Pakistani law related to commercial regulations include contract formation, intellectual property, and competition management, it does not allow both a unified or a franchise-focused legal system. This gap in the law leaves both the franchisors and the franchisees in ambiguities that are characterized by inconsistency in the contractual performances, inadequate enforcement process and ambiguity in regulations.
The current paper takes a sharp look at the legal issues that surround franchising in the commercial industry in Pakistan. It is started with conceptual overviews of the franchising mode, and it is pointed out that there is its significance in global and local markets. The paper proceeds with the evaluation of the existing commercial law regime in Pakistan by major legislations including the Contract Act 1872, the Intellectual Property Organization Act 2012, the Competition Act 2010, and other provisions on taxes that indirectly impact franchising systems. They emphasize especially the difficulties associated with a deficiency of disclosure requirements, mechanism of dispute resolution and protection of proprietary business aspects.
This paper also gives a comparison of how other jurisdictions of advanced franchising law, Britain and Malaysia, and the United Arab Emirates, come up to any meaningful comparative significance in illustrating some regulatory approaches that Pakistan can adopt. These global procedures lay importance on transparency, standardization, and legal certainty, which are the weaknesses of the framework of Pakistan.
In addition, institutional and policy-level gaps discuss the research, e.g. the establishment of a specific regulatory body, unequal treatment of foreign franchise agreements, and the absence of national policy of franchising. These restrictions discourage foreign investment as well as stunt domestic franchise since service sector and retail sectors.
Finally, the paper recommends a law that should be wholesomely overhauled to reflect the Pakistani socio-economic reality. It suggests the development of a Franchising Act which will unite the available rules and provide the new ones aimed at registration, disclosure, application, and dispute resolving. This sort of reform would be necessary to instill some trust, attract investment, and create a sustainable growth within the franchising industry and, therefore, contribute to a broader commercial development program in Pakistan.
Key Words: Franchising, Commercial Law, Pakistan, Legal Framework, Foreign Investment, Regulatory Reform
