Franchising in India operates under a complex legal framework, governed by the Indian Contract Act, 1872, which covers obligations, payments, and dispute resolution. Intellectual property is protected under the Trade Marks Act, 1999, with franchise agreements requiring trademark licensing, IP protection, and quality control clauses.
Foreign franchisors must comply with FDI regulations under the Foreign Exchange Management Act (FEMA), 1999, allowing 100% FDI in franchising, with some exceptions. The Consumer Protection Act, 2019, ensures fair trade practices, and the Competition Act, 2002, prevents anti-competitive behavior.
Challenges include regulatory compliance and franchisee protection. To succeed, franchisors and franchisees should focus on strong agreements, IP and FDI compliance, and dispute resolution through arbitration.
