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French Franchise Agreements - A Brief Overview of French Law

There is no standalone codified French law statute which deals solely with the concept of franchise agreements and yet franchising is particularly well integrated into the world of French business and commerce.

Rather than putting in place a rigid legislative framework, France has instead, perhaps somewhat uncharacteristically, generally left regulation to the market and to case law.

The issue of franchising does however come to a degree within the scope of Law89-1008 of 31 December 1989 known in French as the Loi Doubin.

The applicable provisions therein require the head of a franchising network to communicate what is known as a Document d'Information Prcontractuelle (or DIP) being a pre-contractual information document; to the prospective franchisee at least 20 days prior to entering into a binding commitment.

This DIP must set out inter alia - the number of years the franchisor undertaking has been in existence and trading, the nature and breadth of its experience in the market or industrial sector in question, the current state and future prospects of the market, the current size of the franchisee network, the term or duration of the proposed franchise as well as the conditions relating to its exclusivity, renewal, termination or assignment.

Over and above the provisions of the Loi Doubin and although there is no specific legislative requirement or sanction, it is usually recommended and is becoming a widespread practice that a manuel opratoire or operating manual also be put in place.

Not only does such an operating manual constitute a tool for developing the franchise viz. training and motivating the candidate as well as his or her team but it also permits the existence of the know-how in question to be clearly described and circumscribed and thus, for example, for the franchisor to be in a position to establish the scope and nature of his or her intellectual property to the satisfaction of a Court should that be necessary.

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