State-based fair practice laws seek to equalize the channel power of franchisees relative to franchisors.

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State-based fair practice laws, also known as franchise relationship laws, aim to create a more equitable power dynamic between franchisees and franchisors by regulating certain aspects of the franchisor-franchisee relationship, such as termination or non-renewal of franchise agreements, pricing policies, and promotional programs. By doing so, these laws seek to reduce the information asymmetry, bargaining disadvantage, and dependency of franchisees on their franchisors, and promote fairness, transparency, and stability in the franchising industry.

State-Based Fair Practice Laws Seek to Equalize the Channel Power