The most important element is the transfer of know-how. There can be no franchise without transfer of know-how. The know-how is the set of non-patented, secret, substantial and identified practical information resulting from the experience of the franchisor and tested by him.
The franchise contract must be very specific on the practical terms of the transmission of know-how. In practice, the know-how is synthesized in a “bible” drawn up by the franchisor. In addition, the franchisee must ensure the practical methods of transmitting this know-how.
Indeed, it is important that the franchisor undertakes to:
Provide initial training, the practical terms of which are described in the contract; And
Regularly assist the franchisee throughout the contract. In this regard, the contract must state the number of annual visits by the franchisor.
Termination of the contract in the absence of agreement on a renewal or an extension;
Extension: the same contract continues, only its duration is extended via an amendment;
Renewal: in this case, a new contract is concluded. It should be noted that unlike the lessee under a commercial lease, the franchisee has no right to renewal of his franchise contract. On the other hand, the franchisor must not abuse his right not to renew the contract, for example by not encouraging the franchisee to make significant investments if he knows that he will not renew the contract.
When the franchise contract is terminated before its term, the party initiating the termination is likely to see its liability engaged, or even a penalty clause triggered, unless it can demonstrate the fault of the other party.
If arbitration has the undeniable advantages of confidentiality and speed, it has the disadvantage of its exorbitant cost, the practical effect of which may be to prevent the franchisee from initiating an action on the merits. On the other hand, such a clause does not preclude a summary procedure.
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