Franchising in Luxembourg
Economy
Luxembourg is one of the smallest European countries. Its
economy is largely dependent on banking and due to the country’s
favourable conditions for foreign investments, Luxembourg has
attracted many international businesses (e.g. eBay). Luxembourg has
a GDP of EUR36.7 billion, which is one of the highest per capita in
the world.
Legislation
There is no franchise specific legislation in Luxembourg.
Franchise Market
Franchisors currently operating in Luxembourg include among
others Hilton Hotels, Subway, Pizza Hut and Mexx.
Franchise Legislation
Luxembourg is a civil law country. It has no franchise specific
law, therefore franchise agreements are regulated under the
provisions of the Civil Code of Luxembourg.
- There is no express requirement of pre-contractual
disclosure in Luxembourg. However the parties must act in
good faith, which means they must not conceal
information.
- Pre-contractual negotiations may give rise to legitimate
expectations, therefore the party who conducts such negotiations in
bad faith may be obliged to repair the damage suffered by the other
party.
- There are no franchise registration
requirements.
- A concluded agreement can only be terminated prior to the
expiry of the term for breach or by mutual consent of the
parties.
Conclusion
With no requirements of pre-contractual disclosure or franchise
registration, establishing a franchise in Luxembourg is relatively
straightforward. One feature which distinguishes Luxembourg
from other EU countries is its smaller size which may lead to a
quicker saturation of the franchise market. A thorough research
into the local market and the choice of partner is key to
success.
For more information please contact Graeme Payne.