TOWARD AN EGYPTIAN FRANCHISING LAW BASED ON A COMPARATIVE STUDY OF THE LAWS OF THE UNITED STATES, CHINA, AND MALAYSIA

With the largest population in the Arab Middle East and serving as a midway point between Europe and East Asia at the center of the Middle East, Egypt offers one of the biggest sources of franchising markets in the world with new business opportunities. Egypt, however, does not have a specialized law regulating franchising which results in real challenges for investors seeking to franchise their businesses in Egypt, their legal advisors, and the courts deciding disputes arising from franchising transactions. The result of this lack of franchising laws in Egypt is that other laws have a substantial impact on franchising. Examples include contract, commercial, and agency laws. The outcome is that various laws and regulations apply to franchise transactions that contradict the very specific nature of franchising and make it difficult to negotiate and decide various issues arising from franchise agreements. Also, the application of such a variety of laws imposes heavy burdens on franchising parties. Time could not be better to discuss having a franchising law in Egypt. Legal reform is highly needed to recover from the economic impact of the January Revolution and to improve the chances for foreign investment. This dissertation examines franchising laws in countries that work as guidance to Egypt in establishing a new franchising law. The American franchise law was chosen as a representative example of the common law system, the Chinese franchise law as an example of the civil law system, and the Malaysian law as an example of the Islamic legal system. They will be compared and discussed in order to arrive at a proposed model for Egypt. This dissertation concludes that a comprehensive Egyptian franchise law proposal should address various issues that are usually dealt with through franchise laws around the globe such as disclosure commitments, registration requirements, and substantive rights and obligations of the parties. The model law recommended by the dissertation is a combination of the laws of the three examined legal systems. Being a civil law country should not prevent Egypt from following other franchising systems as long as those rules meet the Egyptian franchising legal market's requirements. Also, the fact that Islamic law is the main source of law in Egypt may not weigh so heavily when drafting a franchising law in Egypt as it turns out that Islamic law does not really affect franchise rules.