Franchising in Estonia
Background
Estonia is a country in the Baltic region of Europe with an area
of 45,226 square miles and population of 129937 (2009). Its GDP is
approximately $27.46 billion and is a parliamentary democracy.
Estonia joined the European Union in 2004.
There are a few international franchises especially in the car
rental, travel and hotel & leisure sectors. The number is
gradually growing.
Legislation
There is no specific franchise legislation and franchise
agreements are regulated by the Law of Obligations
Act which came into force in 2002.
There is no registration requirement.
Franchise Legislation
- There is a pre-contractual disclosure requirement under the Law
of Obligation Act to provide information essential to the
conclusion of the contract.
- There is a right of action under the Civil
Code for misrepresentation and it is possible to rescind
the contract on that basis.
- Franchisors are expected to give proper instructions,
supervision and ongoing assistance to franchisees. Franchisees have
an obligation to maintain the quality of goods and services and
provide appropriate additional services required or expected by
local customers.
- Principles of good faith and reasonableness apply to franchise
relationships and agreements.
- Competition Law applies to franchise
agreements.
Conclusion
It is important to take advice that pre-contractual disclosure
requirements have been fulfilled along with other obligations under
the law to avoid rescission of the contact or damages.
For more information please contact Lisa Sen.