Consumer Protection from the Harmful Effects of Franchise Companies in Comparative Law (Iraq, Iran, Egypt(

Abstract

The core problem addressed by this research lies in the legal challenges that arise when a consumer suffers material, physical, or moral harm as a result of consuming a defective product or receiving substandard service from a franchisee. Under traditional rules of civil liability and the principle of the relativity of contractual effects, the legal and financial independence of the franchisee acts as a formidable legal barrier, often preventing the harmed consumer from seeking recourse against the franchisee, which is, in reality, the financially stronger company and the primary beneficiary of product promotion. This situation creates a legislative and practical vacuum that threatens consumer rights, especially given the variations in national legislation regarding how to address this complex relationship. This raises profound questions about the adequacy of general rules of contractual and tortious liability and current consumer protection laws to provide effective and efficient protection that redresses harm suffered by the consumer and guarantees their right to fair compensation.

The paramount importance of this study lies in highlighting this contemporary issue within a comparative legal framework encompassing the legal systems of Iraq, Iran, and Egypt—countries experiencing significant growth in both foreign and domestic franchise activity. This study derives its significance from the pressing need to strike a fair balance between encouraging investment and stimulating commercial activity, on the one hand, and providing maximum consumer protection, on the other. This is particularly crucial given that the legislation in the countries under comparison may vary in its understanding of the specific nature of franchise agreements and in the mechanisms for applying consumer protection provisions to the parties involved. Therefore, this research aims to explore and analyze the legal basis upon which parties to a franchise agreement—whether the franchisor or franchisee—can be held jointly or severally liable for damages suffered by the end consumer.