FRANCE Law and Practice Contributed by: François-Xavier Awatar and Lina Lahlou, Osborne Clarke
3. Franchise Registration 3.1 Mandatory Registration
There is no legally prescribed duration for the opera - tion of such pilot establishments, nor is there a man - datory minimum number of pilot locations; these matters are assessed on a case-by-case basis by the courts, having regard to the nature of the business and the circumstances of each case. 5. Duration, Renewal and Termination 5.1 Duration of a Franchise Agreement French law does not prescribe any minimum or maxi - mum duration for franchise agreements. The determi - nation of the term of the agreement is a matter falling within the contractual freedom of the parties, who may elect to conclude either a fixed-term or an indefinite- term agreement, subject to compliance with the pro - hibition on perpetual commitments set forth in Article 1210 of the Civil Code. It should be noted, however, that the European Code of Ethics for Franchising recommends, at Article 5.5, that the duration of the franchise agreement be set so as to enable the franchisee to amortise the invest - ments specific to the franchise. Notwithstanding the foregoing, where the franchise agreement contains an exclusivity clause, the duration thereof shall be subject to the limitations imposed by applicable competition law (see 6.2 Exclusive Terri- tories and Competing Businesses ). 5.2 Franchise Renewal The franchisee has no vested right to the renewal of the franchise agreement (Article 1212 of the French Civil Code). The parties may contractually provide for the tacit renewal of the franchise agreement or for a renegotiation of its terms upon expiry; however, no such provision is required as a matter of law. Neither the franchisee nor the franchisor is under any statutory obligation to renew the agreement upon the expiration of its term. Compensation Upon Non-Renewal In the event that the franchise agreement is not renewed upon expiry, no compensation is payable to the franchisee as of right, unless the agreement expressly provides otherwise.
Under French law, there is no registration requirement applicable to franchising. Neither the franchisor nor the franchise agreement is subject to any obligation of registration prior to or in connection with the develop - ment of a franchise network within French territory. Notwithstanding the foregoing, it should be noted that the trade mark licence component of a franchise agreement, whilst not subject to any registration requirement as a condition of validity between the parties, must be recorded with the French National Institute of Industrial Property ( Institut national de la propriété industrielle – INPI) in order to be enforce - able against third parties, in accordance with Article L. 714-7 of the Intellectual Property Code. This flex - ibility encourages the establishment of new franchise networks. 3.2 Franchise Registration Process There are no registration formalities for a franchise agreement in France. 3.3 Consequences of a Failure to Register As no specific registration requirement exists in respect of franchise agreements under French law, the question of consequences arising from a failure to register does not arise. French law does not impose any requirement upon the franchisor to demonstrate past profitability across a minimum number of outlets prior to developing a franchise network. However, the franchisor is required to evidence know-how that is both proven and sub - stantial, and must be in a position to demonstrate the commercial success of its concept. In practice, this entails the prior operation by the franchisor of one or more pilot establishments over a period of sufficient duration to establish the viability of the concept. 4. Other Requirements 4.1 Past-Profitability Requirements
16 FRANCHISING 2026
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