FRANCHISING AS A COMMERCIAL OPTION: AN ANALYSIS OF THE LEGAL FRAMEWORK FOR ITS VIABILITY IN NIGERIA

Abstract

Franchising stands as a globally significant business model with profound potential to drive entrepreneurship, job creation, and economic development in Nigeria. However, despite its increasing adoption, the sector's growth is critically hampered by an inadequate legal and regulatory environment. This paper provided a critical analysis of the legal framework governing franchising in Nigeria, arguing that the conspicuous absence of a dedicated, comprehensive franchise statute fundamentally undermines the viability of franchising in the country. This situation creates significant legal risks, deters foreign investment, and fails to provide adequate protection, particularly for franchisees who face information asymmetry due to the lack of mandatory disclosure requirements. Employing a doctrinal and analytical methodology, this study scrutinized the existing mosaic of applicable laws, the complex multi-agency regulatory requirements involving bodies such as NOTAP and the CAC, and the transformative potential of the proposed Franchising (Establishment) Bill 2022. The analysis found that while the current framework offers some protection, it is insufficient to foster a stable and attractive environment for franchising. Ultimately, this paper concluded that for Nigeria to unlock its vast franchising potential, legislative action is paramount. The pending Franchise Bill is identified as a crucial, though stalled, step towards aligning Nigeria with global best practices by introducing mandatory disclosures and standardized provisions. It therefore, recommended the immediate enactment of the Franchising Bill, the strengthening of IP enforcement mechanisms, the streamlining of the complex multi-agency regulatory environment to foster investor confidence and ensure a fair and predictable commercial landscape.