Youwant to develop the distribution of your products in your market by organising competition between your distributors.
One of the keys to success is to organising territorial competition as bestas possible between your distributors: everyone must dedicate themselves to developing sales of your products in their local market.
In this context, you do the territorial exclusivity of your distributors is the founding principle of your network.
Exclusive distribution will meet your needs.
The exclusive distribution contract commits a supplier to selling its products to only one distributor (or maximum five exclusive distributors in the same territory), in a territory determined in the contract and for a sustainable period. In some cases, the exclusivity is reciprocal, the distributor agreeing to source only from the supplier who has granted him the exclusivity of distribution.
In the latter case, this is referred to as a commercial concession or exclusive concession.
Exclusive distribution has two drawbacks:
- it restricts the supplier’s offer, which can only sell its products to its distributors ;
- it limits the number of points of sale and, thus, consumer choice.
However, the monopoly granted to the exclusive distributor is not absolute : “passive sales “, that is to say those unsolicited by the distributor, including sales on the internet, cannot be restricted. Only theactive sales » ; that is to say, advertising and canvassing outside the territory of the exclusive distributor may be limited. The block cartel exemption regulation in force since 2022 reinforces the prohibition of “active sales “with an extension of the latter to direct customers of the exclusive distributor and no longer only to other exclusive distributors (so-called” pass on ” ; Art. 4 (b) VBER 2022/720).
We draft many contracts of commercial concession. We apply proven methods to createcommercial concession networks and are familiar with benchmarks in your industry.
Thecommercial concession contract meets strategic challenges for your network:
- it must translate your organisation;
- it must maximize the distribution of your products and therefore your sales;
- it must protect your product stocks, your brands, your data and the perimeter of your network;
- it must integrate the dimension of the market and competition law, to protect you from compliance risks.
Our method for drafting your exclusive distribution or commercial concession contract
GOUACHE Avocats’ approach to draftingexclusive distribution or commercial concession contracts is simple:
(i) the exclusive distribution or commercial concession contract is a technique for organizing your distribution: we are first interested in you, your business, the way you want to organize your relations with your dealers.
For this, we listen to you and have designed exclusive digital tools to help you in your reflection and guide you in your choices. We are with you. We welcome you to discuss with you your organisational choices, the choices to be made and help you decide by sharing our benchmarks and our reflections.
(ii) the clauses of the exclusive distribution or commercial concession contract must be clear and easily understandable, both for your future affiliates, who must understand the consideration and the reason, and by the judge who will be responsible for deciding the dispute to which the contract could give rise: this is to reduce the judge’s power of interpretation, which is a source of insecurity for companies. For these reasons, we have used legal design techniques to further improve the presentation of our contracts and their accessibility, without giving up any of our contractual management tools.
(iii) the drafting of the clauses of the exclusive distribution or commercial concession contract is worked on scientifically to ensure the greatest legal certainty: we have in-house litigators, based on our significant experience in distribution litigation and on a systematic analysis of case law (weekly cabinet review); these clauses follow a validation process involving a law professor.
A tailor-made exclusive distribution or commercial concession contract
The quality of yourexclusive distribution or commercial concession contract , fully customized, will directly depend on:
- the level of control of your network (product image, price homogeneity, scope of points of sale);
- the distribution of your products;
- the enhancement of the network of exclusive distributors or dealers.
