Das Franchise-Paradox

Franchise systems are hybrids between market and hierarchy. Their economic power generates from the combination of unity and plurality, hierarchy and heterarchy, market and organization. Economics and social sciences have been dealing with the hybrid character of franchise systems and other network-like organizations for a long time. In the meantime, lawyers have also become interested in entrepreneurial structures between market, hierarchy and network. Judith Schacherreiter starts by dealing with those insights into the paradoxical character of franchise systems which were obtained by 'law and economics' and systems theory. Based on this, she asks whether and how the paradoxical character is relevant within the legal system. To answer this question, she translates the opposition of 'market versus hierarchy/organization' into legal dichotomies: the franchisee as employee or as self-employed, the multitude of franchise contracts as a bundle of bilateral contracts or as a uniform association, the franchise relationship as a simple civil law relationship or as a corporate relationship. These questions are analyzed from the perspective of German law, Austrian law and private international law. The author shows that both in substantive law and in choice of law, franchise systems irritate the legal system and make it oscillate between autonomy and dependency, plurality and unity, hierarchy-like internal and market-like external control.