The status of branch manager (Article L 7321-2 of the Labour Code)

The branch manager is an independent trader, who may, under the legal conditions defined in Article L. 7321-2 of the Labour Code, benefit from the collective status of labour law.

Thus, any trader, such as a franchisee, meeting the conditions of Article L.7321-1 of the Labour Code, will be able to benefit from the provisions of labour law, without the franchise contract having to be reclassified as an employment contract, that is to say without a relationship of subordination having to be proven.

 “A branch manager is any person:
1. Responsible, by the company manager or with his agreement, for making himself available to customers during their stay in the premises or dependencies of the company, in order to receive from them deposits of clothing or other objects or to render them services of any kind;
2. Whose profession consists essentially of:
a) To sell goods of any kind supplied to them exclusively or almost exclusively by a single company, when these persons exercise their profession in premises supplied or approved by this company and under the conditions and prices imposed by this company;
b) Or to collect orders or to receive goods to be processed, handled or transported, on behalf of a single company, when these persons exercise their profession in a premises provided or approved by this company and under the conditions and prices imposed by this company “.

Three cumulative conditions must be met, in law or in fact, for a franchisee to qualify as a branch manager:

•  
  the exclusive or quasi-exclusive supply of the goods by the franchisor;
• the supply or approval of the premises by the franchisor (to which is assimilated the obligation for the franchisee to arrange its premises to the architectural standards of the franchisor);
• the imposition by the franchisor of the working conditions and prices on the franchisee.

If the franchisee is recognised as a branch manager, as this status can only be recognised by the judge (jurisdiction of the Labour Court), the franchisee may in particular apply to the franchisor for:

• damages for dismissal without real and serious cause;
• compensation in lieu of notice;
• an allowance for paid leave;
• the guarantee of the minimum wage provided for by the applicable collective agreement;
• reimbursement of company incorporation costs;
• the refund of the entrance fee.

As the rule of Article L.7321-2 of the Labour Code is a rule of public order, it is not possible to exclude its application by a clause of the franchise contract. Nevertheless, there are network organization techniques developed by the firm that in most cases make it possible to avoid the application of this text.