What is dip?

It is a Pre-contractual Information Document: this  is what this dip acronym means.

In other words, a document prescribed by law, specifically in Articles L-330-3 and R-330-1 of the Commercial Code which provides an inventory to Prévert of information to be brought to the attention of the franchisee so that he can sign the franchise agreement with full knowledge of the facts.

It mentions who the franchisor is, the contractual commitment it will take out, the market and certain financial parameters such as prior investments that are necessary to operate the franchise. 

They are twofold: first of all, there is a criminal penalty, you have to know, it is often forgotten and there is a 5th class fine that is incurred. This contravention is rarely put into practice but it nevertheless exists.

The issue is mainly civil: if the dip is never issued or contains erroneous information, or if the information is fragmentary, or absent, and the franchisee has entered into the franchise agreement, whereas he would not have entered into it if he had known all the information and if this information had been sincere, then his consent may be flawed.

The defect of consent is a defect that affects the validity of the franchise contract and that allows, if it is proven, to obtain in court the nullity of the contract, that is to say the retroactive annulment, which will cause the restitution of the right of entry, the restitution of the royalties and the compensation of the damage suffered by the franchisee due to the pronouncement of the nullity.

It is therefore an important issue to ensure the soundness of the network’s contracts to have a complete dip that complies with the law. 

The dip contains information that will expire. The state of the market at a time T will not necessarily be at a time T+1, the costs of access to the concept could increase in an inflationary period, so all this information needs to be updated.

And I’m going to provide an answer that probably won’t be exhaustive but that’s the principle: they need to be updated as often as necessary to ensure their sincerity, that is, they continue to be fair enough for the franchisee to make an informed commitment.

So it is necessary to set up a process of periodic verification of each typology of information, this is what we provide to our customers. 

The law prescribes a period of 20 days between the delivery of the dip and the signing of the franchise contract to allow the existence of a sufficient period of reflection before the signing of the commitment.

This period is never prescribed under penalty of nullity and therefore the judge, if this period is not respected, will assess whether the fact that it has not been respected, shortened, will contribute to vitiate the franchisee’s consent with the consequences that I have just indicated to you.

If this period is longer, no difficulty, on the contrary, the franchisee will have additional time to think, learn, and commit.