(a) There are many different and complex arrangements by which
businesses may join to perform their activities for a common purpose. A
general discussion will be found in part 776 of this chapter. The
quotation in Sec. 779.229 from the Senate Report shows that Congress
recognized that some franchise, lease, or other arrangements have the
effect of creating a larger enterprise and whether they do or not
depends on the facts. The facts may show that the arrangements are so
restrictive as to deprive the individual establishment of those
prerogatives which
are the essential attributes of an independent business. (Compare Wirtz
v. Lunsford, 404 F. 2d, 693 (C.A. 6).) An establishment through such
arrangements may transfer sufficient ``control'' so that it becomes in
effect a unit in a unified chain operation. In such cases the result of
the arrangement will be to create a larger enterprise composed of the
various segments, including the establishment which relinquishes its
control.
(b) The term ``franchise'' is not susceptible of precise definition.
The extent to which a businessman relinquishes the control of his
business or the extent to which a franchise results in the performance
of the activities through unified operation or common control depends
upon the terms of the contract and the other relationships between the
parties. Ultimately the determination of the precise scope of such
arrangements which result in creating larger enterprises rests with the
courts.
