Franchising in France
Economy
France has got the fifth largest economy with a GDP of €1.9
trillion (2008).
Legislation
There is no franchise specific law in France, but franchisees do
enjoy a relatively high level of protection.
Franchise Market
Franchising is a strong part of the French economy. In 2006
there were more than 900 active franchisors in France.
France has a long history of franchising with the first
franchise reportedly having been founded in 1911, although the term
“franchising” did not exist back then.
There are a number of annual national and international industry
meetings and trade fairs in France such as the Franchise Expo
Paris, Top Franchise in Marseille and Mapic in Cannes.
Most franchise businesses operate in the food & beverages
sector as well as retail (here in particular clothing and
furniture).
Franchise Legislation
France is a civil law country. As there is no franchise specific
legislation a number of statutes apply to franchising.
- under Article 330-3 of the Commercial Code (Loi Doubin), a
franchisor must provide prospective franchisees with a
disclosure document at least 20 days before the
execution of the agreement or payment of any monies. There is a
list of specific items which require disclosure
- there is no registration requirement
- the principle of good faith has an impact on the relationship
between franchisor and franchisee. It implies an obligation of
loyalty and cooperation at all stages of dealing
- franchisees may be considered employees of the
franchisor if the degree of supervision under the
franchise agreement is such that the franchisee appears to be
subordinated to the franchisor. This may have tax implications as
well as an effect in the relationship between the parties as the
franchisee may be able to claim certain employee’s rights
Conclusion
Franchising in France is heavily regulated and it is essential
that franchisors take detailed legal advice before entering the
French market to ensure that they comply with the disclosure
requirements. Failure to comply can have severe consequences
ranging from nullity of the agreement, to civil or even criminal
sanctions.
For more information please contact Graeme Payne.