What constitutes a franchise agreement pursuant to French law?
Updated: Feb 12
French law does not provide for a specific definition of a franchise agreement but rather focuses on the obligations of the parties arising out of the exclusivity imposed on the Franchisee to work under the trademark and in compliance with the know-how licensed by the Franchisor, which are considered essential elements of this type of contract.
In EU law, the Franchise agreement was defined by Commission Regulation (EEC) No 4087/88 of 30 November 1988 on the application of Article 85 (3) of the Treaty to categories of franchise agreements, as “an agreement whereby one undertaking, the franchisor, grants the other, the franchisee, in exchange for direct or indirect financial consideration, the right to exploit a franchise for the purposes of marketing specified types of goods and/or services, and which would include at least obligations relating to:
the use of a common name or shop sign and a uniform presentation of contract premises and/or means of transport,
the communication by the franchisor to the franchisee of know-how,
the continuing provision by the franchisor to the franchisee of commercial or technical assistance during the life of the agreement”.
The term “franchise” was defined by the Regulation as “a package of industrial or intellectual property rights relating to trade-marks, trade names, shop signs, utility models, designs, copyrights, know-how or patents, to be exploited for the resale of goods or the provision of services to end users”.
The Regulation (EEC) No 4087/88 of 30 November 1988 is no longer in force, however the elements of the definition of “franchise” and “franchise agreement” which it provides are frequently referred to in French law to qualify an agreement as such.