Franchising 2026

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

• any clause relating to an anti-competitive practice prohibited by Articles L. 420-1 et seq of the Com - mercial Code; and • clauses giving rise to a significant imbalance in the rights and obligations of the parties within the meaning of Articles L. 442-1 et seq of the Com - mercial Code. 9. Dispute Resolution 9.1 Enforcement of Foreign Judgments Judgments rendered by courts of EU member states are recognised and enforced in France pursuant to Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Brussels I bis Regulation”), which provides for the automatic recognition and enforceability of such judg - ments without the need for any special procedure. For judgments emanating from states party to the 2007 Lugano Convention (Iceland, Norway and Swit - zerland), recognition and enforcement are governed by the provisions of that Convention. In respect of judgments rendered by courts of third states not cov - ered by any of the foregoing instruments, enforce - ment in France requires the obtaining of an exequatur through judicial proceedings before the competent Tribunal judiciaire . In the absence of any applicable convention or regula - tion, French case law has established three cumula - tive conditions for the grant of exequatur: • the indirect jurisdiction of the foreign court that ren - dered the decision; • compliance of the decision with French interna - tional public policy; and • the absence of fraud. With respect to international arbitration, France is a party to the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. Foreign arbitral awards are accordingly rec - ognised and enforced in France, subject to a limited review of their conformity with international public policy. France is traditionally regarded as a jurisdiction

favourable to international arbitration, as reflected in the liberal case law of the Cour de cassation and the Paris Court of Appeal. It should further be noted that arbitration clauses con - tained in franchise agreements concluded between professionals are valid and enforceable under French law. 10. Payment and Taxes 10.1 Restrictions or Limits on Franchisee Fees and Royalties French law does not impose any statutory cap on franchise fees, royalties or service fees. The principle of contractual freedom prevails in respect of the deter - mination of the amounts payable by the franchisee to the franchisor, and the parties are at liberty to agree upon the quantum, structure and payment terms of such fees, whether by way of a lump-sum amount, a percentage of turnover or any other method of cal - culation. Notwithstanding the foregoing, where the fees or royalties stipulated in the franchise agreement are manifestly excessive, the franchisee may invoke the prohibition on significant imbalance in the rights and obligations of the parties, within the meaning of Article L. 442-1 I of the Commercial Code. Furthermore, the franchisee may seek the annulment of the agreement on the ground of derisory or illusory consideration pur - suant to Article 1169 of the Civil Code. The imposition of resale prices by the franchisor upon the franchisee is strictly prohibited under both French and European Union law. In any event, as set out in 2.1 Mandatory Disclosure , no sum whatsoever may be received by the franchisor prior to the expiration of the 20-day period following the delivery of the pre- contractual information document, in accordance with Article L. 330-3 of the Commercial Code. Regarding currency, as a general rule, payments are made in euros. However, payments may be made in another currency if the obligation arises from an inter - national transaction. In the case of a master franchise

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