Franchisor

After operating a commercial and architectural concept, under a Brand, a company may wish to develop its concept by allowing third parties, independent merchants – and future franchisees – to reiterate its commercial success, as part of a franchise network.

Under the terms of the franchise agreement, the franchisor is therefore the party who grants to a third party – commercial company or sole proprietor – the right to reproduce its concept, under its name, according to identified, secret, substantial and proven know-how, by providing assistance in the implementation of the concept thus developed.

The franchisor, in its contractual relations with its franchisees, is subject to three essential obligations, inherent to this form of organized trade:

the provision of distinctive signs: brand, logo, website, perfume, architectural concept are all essential elements for the reiteration of the franchisor’s commercial success by the franchisee. This is for the franchisor to confer rights on these distinctive signs, but also to maintain them throughout the duration of the franchise agreement and to protect them against third party infringements;

the assistance of the franchisee: as the assistance is an integral part of the franchised business method, the franchisor must provide both technical and commercial assistance in the implementation of its know-how;

the development of the reputation of the network: since the reputation of the network is a sign of customer rallying, the franchisor has the obligation to maintain the image of the network and the brand and must, in order to do so, control the respect of know-how by all its franchisees, within the limit of respect for the independence of the franchisee.

Other obligations, which do not fall within the very essence of the franchise agreement, may be imposed on the franchisor, such as the provision of its general conditions of sale, as soon as an exclusivity of supply from the franchisor – as a central purchasing body – is imposed on the franchisees of the network, or the territorial exclusivity, under the terms of which the franchisor grants the franchisee the monopoly of operation of its brand in a given territory.

In any event, all obligations incumbent on the franchisor, whether or not inherent in the franchise agreement, must be defined contractually. The absence of contractualisation of the former may lead to the requalification of the contract in another form of distribution, the absence of contractualisation of the latter therefore not being attributable to it.