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"If men were angels, no government would be necessary," writes franchisee attorney Paul Steinberg, quoting a passage from James Madison in The Federalist. He concludes this about franchising, "Notwithstanding franchisor invocations of Jesus Christ, franchisors are no angels."
The then law student Paul Steinberg and the late Gerald Lescatre wrote a research paper for Penn State Law Review where a pattern of cases is laid out and organized that highlight the gaps in modern franchise law. Beguiling Heresy: Regulating the Franchise Relationship speaks brilliantly about the limits of franchise contracts as a tool to govern the franchise relationship.
The law is set up to favor franchisors.
"Franchisors will complain that relationship legislation, with its concern with good faith and fair dealing, will inject an element of uncertainty into the franchise relationsip. But there is already an element of uncertainty: it exists in the mind of the franchisee living each day with the knowledge that a capricious franchisor may rob the franchisee of a life's savings -- with an approving nod from the courts and regulators."
Steinberg concludes, "This may be legal. But is it ethical?"
Weakness: Although I wish the book had an index, it does have 1,150 footnotes of legal and franchise citations. Every assumption seems backed up by a researched fact, case or statistic. It is a law review, highly technical. It took 68 pages of the book to reveal what its title "Beguiling Heresy" is talking about. "Beguiling Heresy" refers to an English lawyer's argument against courts that rule against abusive contracts. It might be beguiling to the judge to seek "justice" but it is heresy, the lawyer argued, because it erodes at the pinning of contractual law to the point that the law itself becomes a whim. Despite the lawyer's argument to not interfere with contracts even when there is no good faith for the sake of the rule of law, common law and American law has long found it necessary to dismiss parts of contracts in certain cases and to regulate them. In its 152 pages, the book answers why regulating franchising is necessary.