Franchising 2026

FRANCE Law and Practice Contributed by: François-Xavier Awatar and Lina Lahlou, Osborne Clarke

by the Macron Act of 2015 (Articles L. 341-1 and L. 341-2). The legal framework governing franchise arrange - ments is further shaped by the application of the fol - lowing bodies of law: • competition law, including the prohibitions on anti-competitive agreements and abuse of domi - nant position or economic dependence set forth in Articles L. 420-1 and L. 420-2 of the Commercial Code, as well as EU Regulation 2022/720 on verti - cal agreements (the VBER); • intellectual property law, as codified in the Intellec - tual Property Code; and • the law on restrictive trade practices, in particular the provisions of Article L. 442-1 of the Commer - cial Code, which prohibit the creation of a signifi - cant imbalance in the rights and obligations of the parties and the abrupt termination of established commercial relationships, both of which are of par - ticular relevance to franchise arrangements. Applicable Non-Binding Provisions The European Code of Ethics for Franchising sets out the fundamental principles governing franchise rela - tionships and establishes standards of good practice applicable to franchisors and franchisees alike. 1.3 Definition of a Franchise Agreement In France, there is no statutory definition of a franchise. However, the concept has been defined through both European and French case law. Under European case law, a franchise arrangement is one whereby an undertaking that has established itself in a given market as a distributor and has there - by developed a body of commercial methods grants, in return for remuneration, independent traders the right to establish themselves in other markets using its business name and the commercial methods that have proved successful. French case law has further refined this definition by identifying three essential criteria for the characterisa - tion of a franchise agreement:

• the existence of know-how that is identified, secret and substantial, capable of being transmitted and enabling the franchisee to replicate the franchisor’s success by conferring a substantial competitive advantage; • the provision of assistance by the franchisor both at the launch of the franchisee’s business and throughout the performance of the agreement; and • a business name or sign capable of attracting a pre-existing customer base, together with the grant of a trade mark licence. In consideration thereof, the franchisee undertakes to comply with the standards imposed by the franchisor and is required to pay royalties. These three constitu - ent elements have also been incorporated into the European Code of Ethics for Franchising. 2. Franchise Disclosure 2.1 Mandatory Disclosure Pre-Contractual Disclosure Obligation Under the Commercial Code To safeguard the franchisee’s informed consent, Arti - cle L. 330-3 of the Commercial Code – derived from the Doubin Act (Law No 89-1008 of 31 December 1989) – imposes upon the franchisor an obligation to furnish pre-contractual information to the prospective franchisee. The prescribed content of such informa - tion is exhaustively set out in Article R. 330-1 of the Commercial Code. The pre-contractual information document must con - tain the following particulars. • The address of the registered office, the nature of the business activities carried on, the legal form of the entity, the identity of the owner or of the corpo - rate officers and the amount of the share capital. • The company’s registration number and the trade and companies register ( registre du commerce et des sociétés ) with which it is registered, together with the date and number of the trade mark regis - tration or filing. Where the trade mark has been the subject of an assignment or licence, the date and number of the corresponding entry in the National

13 FRANCHISING 2026

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