Is there any UK legislation that’s specific to franchising?

There are very few laws relating specifically to franchising, but there are a number of issues that can affect franchising in the same way that they can affect many businesses, including restraint of trade, transfer of employees under employment law, pre-contractual misrepresentation, property issues and the franchisor’s liability for acts of its franchisees.  In addition, the Trading Scheme Act 1996 is of relevance as it was introduced to try to address pyramid selling. Pyramid selling became an issue when ‘franchisees’ found it more profitable to appoint further ‘sub-franchisees’ to sell the franchised goods or services, rather than selling them themselves. Although not aimed at legitimate franchise businesses, the majority of franchise agreements do fall within the scope of the TSA, but are able to benefit from either of the two exclusions, namely that all franchisees operate at a single level below the franchisor or all franchisees in the network are registered for VAT.  The British Franchise Association promotes self-regulation through insisting that all members comply with a code of ethical conduct. Under the code a franchisor is required to have operated a pilot business prior to the launch of the official franchise business, to own all brand names and trademarks that the franchise business uses and provide the franchisee with both initial and ongoing training. The code also places further obligations on the franchisor in relation to recruitment, advertising, disclosure, franchisee selection and the franchisee’s right to be able to renew the franchise agreement.