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date: 19 October 2019

Abstract and Keywords

This chapter examines vertical restraints and restrictive contract clauses in franchising and distribution agreements. First it briefly outlines the history of franchising and presents some data on franchising in the United States. It then discusses the extent to which franchise and distribution relationships rely on specific vertical restraints and the evidence regarding the efficiency, or lack thereof, of those arrangements. It next describes how changes in the antitrust treatment of some practices are affecting franchise contracts and franchise relationships today. It concludes with some comments on the contractual nature of distribution and franchise relationships and the need for different jurisdictions to reach a consensus concerning the role of, and harmonize the treatment of, restrictive contract clauses in distribution and retailing.

Keywords: franchising, distribution, vertical restraints, restrictive contract clauses, efficiency

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