Franchise contract – is the agreement of will between two or more people with the intention of establishing,
modify or delete a legal relationship.


THE FRANCHISE AGREEMENT

Franchise contract – this document constitutes the legal basis for all franchise systems. In the provisions
its are the rights and obligations of both parties, i.e. franchisor and franchisee. Also, the contract
sets the course of the partnership and defines the terms and conditions, the roles of the respective partners. Above
all, it is important to ensure that rights and obligations are in a fair balance and that there is no
no disproportion.
 

WHAT SHOULD A FRANCHISE AGREEMENT CONTAIN?

Preamble
Subject of the contract
Territory/ commercial premises
Obligations and rights of the franchisor
Purchase / sale of goods
Franchisee's Obligations and Franchisee's Rights
Marketing
Duration / termination of the contract
Dispute Resolutions
The right of termination, concessions, etc.
 

THE FRANCHISE AGREEMENT?

In addition, each franchise agreement must be individually tailored to the respective franchise system and legislation
afferent. This leads to the need for additional provisions that should also be regulated in the contract.
 
PRE-CONTRACTUAL STAGE
The so-called "pre-contractual stage" is also of immense importance in substantiating the decision to
signing the contract. It finds its legal basis, among other things, in the principle of good faith. There are three
groups of cases to consider:
False and misleading statements
The real duty to inform
Obligation to provide the disclosure document
 
FRANCHISE AGREEMENT
Specifically, the franchisor provides the candidate with the disclosure document and must inform
the potential franchisee about circumstances that are known only to the franchisor and that may be material
for the potential franchisee in the decision-making process. In addition, the franchisor has a duty to clarify questions
specifics from the potential franchisee.
It should be noted, however, that the franchisor is not a consultant and does not have to provide a complete calculation of profitability, but, according to the law, he provides some estimates.
The parties are free to conclude any contracts and determine their content, within the limits imposed by law, by
public order and good morals. The contract by which each party seeks to procure an advantage in
the exchange of assumed obligations is for onerous purposes.
 
The contract can be consensual, solemn or real. The contract is consensual when it is formed by
the simple agreement of the parties. The contract is solemn when its validity is subject to the fulfillment of certain conditions
formalities provided by law. The contract is real when, for its validity, remittance is necessary
the good.
 
FRANCHISE AGREEMENT?