Brand Piracy By Franchisees

Abstract

This research explores the situation in which a franchisee exits the franchise system but continues to operate independently. This action is a form of brand piracy as the former franchisee exploits the intellectual property of the franchisor. A franchisor, a former franchisee and a current franchisee from six franchise systems were interviewed in order to obtain diametrical viewpoints. It was concluded that brand piracy has serious implications in franchising because operators were continuing to use the franchise's intellectual property and customer base, with potential damaging effects on the franchisor brand and system.