In terms of risk, however, the distributor and particularly the franchisee are dependent upon a continuing supply of the supplier's products and services for their existence. In some instances, the form of the disclosures must be filed with and approved by a state agency. In general, these state and federal statutes and regulations are premised on the notion that full disclosure will deter abuses by unscrupulous franchisors. They also provide for a variety of public and private enforcement mechanisms. Many of these statutes and regulations contain provisions exempting certain categories of franchise relationships from their scope.
Similar relief is available under common law and statutes adopted in many states.
The law that has developed under these statutes is so heavily dependent on the holdings in particular cases that a short, yet comprehensive summary is impossible. The issues impacting on terminations are governed almost exclusively by state law. Moreover, with respect to terminations, the protection afforded to franchisees under state law is often greater than that provided to distributors. Typically, the parties' contract is for a specific term, subject to earlier termination for various causes specified in the contract. In the case of distributors, such contractual provisions are generally enforceable.