There is no legal definition of a franchise in French law. The French Franchise Federation refers to the European Code of Ethics for Franchising, which defines franchising as:

 A system of marketing goods and/or services and/or technology,which is based upon a close and ongoing collaboration between legally and financially separate and independent undertakings, the franchisor and its individual franchisees, whereby the franchisor grants its individual franchisees the right, and imposes the obligation,to conduct a business in accordance with the franchisor’s concept. The right entitles and compels the individual franchisee, in exchange for a direct or indirect financial consideration, to use the franchisor’s trade name, and/or trademark and/or service mark,know-how, business and technical methods, procedural system, and other industrial and/or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and for the term of a written franchise agreement, concluded between parties for this purpose.

 

There is no codified mention of franchise agreements in French law. Tere are no specific legal provisions applicable to franchises. General contractual aspects are governed by the Civil Code and commercial aspects are governed by the Commercial Code, and the provision with respect to exclusivity or quasi-exclusivity undertakings impact franchises.

 

There are no government agencies specifically dedicated to the regulation of the offer and sale of franchises. However, franchises fall under the ambit of the competition law and the authority of the General Directorate for Competition Policy, Consumer Affairs and Fraud Control, an administrative body within the Ministry of Economy, and of the Competition Authority, an independent authority.

 

Since a franchise is described by case law as the ‘reiteration of a commercial success’, the franchisor must be in a position to prove, prior to offering a franchise, that it has operated at least one similar commercial business in a manner and, for the time necessary to consider such business, as a success in order to sell franchises in France.

 The Commercial Code provides for pre-contractual disclosure obligations. This is applicable to all agreements by which one person grants to another a trade name, a trademark or sign, and requires an exclusivity or quasi-exclusivity undertaking for the exercise of such other person’s activity. Such document must contain truthful information allowing the franchisee to commit to the contract with full knowledge of the facts.  The pre-contractual disclosure must be made in writing at least 20 days prior to the occurrence of the first of the two following events: (a) signature of the franchise agreement; or (b) payment by the future franchisee of a sum prior to the signature of the agreement, notably in order to obtain the booking of a geographic area.