This Bill is “for an Act to provide for the regulation of franchising in Nigeria; and for related matters”. The franchise business model dates as far back as the early 1950s in Nigeria, but mainly regulated by the law of contract. Other laws relating to intellectual property – such as the Trade Marks Act, Patent and Designs Act, NOTAP Act, etc – apply to regulate the transfer and use of intellectual property in a franchise relation. What the Bill seeks to do is to codify the contract rules and international best practices to provide legal certainty for the franchising market.
Franchise business model is:
“a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system”.
Franchising provides MSMEs with opportunity in two ways: first, for an MSME wanting to scale their business, they can adopt the franchise model and enter into franchise agreement (as a franchisor) whereby they allow other entrepreneurs to operate under their brand and business system as franchisees; for an MSMEs building a new businesses, taking up a franchise from an established brand provides an opportunity to bypass the entire rigour of building brand equity and business systems over time.
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