Franchisee and Franchisor: mutual rights and duties

A franchise agreement binds the franchisee and franchisor in a win-win relationship, governed by the Doubin Law, where both parties have rights and duties.

Franchisor's Rights and Duties

The franchisor, as the creator of a concept and brand, must transmit their know-how and distinctive signs to franchisees and assist them throughout the contract. In return, the franchisor receives entry fees and royalties to compensate their work and fund network development. They can also benefit from supply and non-compete clauses to maintain uniformity and protect their interests.

Franchisee's Rights and Duties

The franchisee, as an independent entrepreneur, operates under the franchisor's brand for a financial consideration. They acquire the right to use the name and symbols of the franchise and must receive regularly updated know-how through initial and ongoing training. The franchisee also benefits from technical, commercial, legal, and logistical support from the franchisor. In return, they must follow the standards and procedures provided to ensure the network's consistency and quality.

This structure maximizes the success chances for both parties, combining innovation with mutual support.

On the franchisee side: clauses to watch out for

Non-compete clause

This clause can prevent the franchisee from becoming a multi-franchisee or continuing the same activity after the contract ends. Negotiate to limit it to a few competing networks to keep your options open.

Clauses related to exclusivity

Contracts may impose exclusive supply agreements, but it's important to maintain partial freedom in purchasing. Be mindful of the franchise exclusivity clause, which could allow the network's own stores to compete, and the brand exclusivity clause, which may permit other stores in the same geographic area.

Clauses related to contract termination

Carefully review the renewal and resale conditions. Approval and preemption clauses can reduce the value of your business if you decide to sell early. Have a specialized lawyer review the contract to avoid pitfalls and negotiate better terms.

Explore more articles on this topic