The change of control of the franchising company does not constitute a violation of the intuitu personae nature of the franchise agreement

The Court recalls that the change of control of the franchising company has no impact on the legal personality of the latter. Indeed, it is a simple modification of the shareholding without consequence on the legal personality, which remains identical. 
Thus and unlike the transfer of the franchise agreement, the change of control of the franchising company, in that it does not modify the legal person, does not affect the intuitu personae of the franchise agreement. Unless otherwise provided for in the franchise agreement, such an operation does not require the prior agreement of the franchisee to the operation. 
With regard to the present case, no clause of the contract provided for a prior agreement of the franchisee in the event of a change of control of the franchisor. 

Consequently, the Court allowed the franchisor’s request. The Franchisee having terminated the Franchise Agreement for an unfounded and faulty reason, the Franchisee shall be imputed a termination to its exclusive fault and ordered to pay damages as compensation to the Franchisor. 
This judgment is also an opportunity for the trial judges to exercise their power to vary the amount of the penal clauses. In this case, the penalty clause providing for the doubling of the royalties that the franchisor should have received until the end of the contract, was considered excessive and limited to a more reasonable amount of €100,000. 

TC Lyon, 12 June 2015 – RG No.2014J01221