The assignment always takes place through a contract (Franchise Agreement), where, in exchange for remuneration, the Franchisee obtains from the Franchisor the right to develop a commercial activity, for the sale of certain products in the name and on behalf of the Franchisor, for the sale of certain products in the name and on behalf of the Franchisee. In exchange for this right and in addition to complying with the obligation to pay the agreed remuneration, the Franchisee undertakes to use the trade name, trademark, know-how and business method in accordance with the guidelines determined and established by the Franchisor.
The Law Firm Navas & Cusi has a wide experience in advising both Franchisees and Franchisors, regarding their rights and obligations and the negotiation of the contracts that are to make up their entire business relationship, with special emphasis on the Franchise Agreement.
Advice to the franchisee
In order to be able to provide good advice to the Franchisee, it is essential to take into account the rights and obligations recognized in the Franchise Law. In the case of the former, they must be properly defended and reflected in the Franchise Agreement and, in the case of the latter, they must not be abusive to the Franchisee.
- Must receive initial assistance from the Franchisor for the start-up of the business. Once in operation, the Franchisee is entitled to receive continuous advice on the management of the establishment.
- To be assigned an exclusive right over a specific territory. The fulfillment of this exclusivity is essential to obtain a business profitability in accordance with the investment to be made by the Franchisee.
- Receive a continuous and timely supply of the products to be marketed in the establishment, under the Franchisor’s brand.
- Use the distinctive signs of the Franchisor, its commercial name, its brand image and make use of the “know how” for which it will receive the appropriate training from the Franchisor.
- Receive an Operations Manual that reflects, clearly and clearly, the way in which the operation of the franchised establishment is allowed to be carried out. This document provides essential legal certainty when carrying out its activity.
Duties of the Franchisee
- To pay the Franchisor the remuneration (“canon”) established in the Franchise Agreement, at the times and in the manner agreed therein.
- Comply with and faithfully apply the instructions established in the Operations Manual.
- Maintain an exclusive product offering. It may not offer products different from those offered by the Franchisor and, in no case, from the competition.
- Accept the supervision of the establishment by the Franchisor and of the Franchisee’s use of the corporate image.
- Acquire the products for sale in its establishment through the purchasing platform established by the Franchisor.
Advice from the franchisor
As in the previous case, Navas & Cusí provides advice to those companies that wish to expand their business by opening establishments whose operation is carried out through Franchisees. To do so, we must take into account their rights and duties:
- The maintenance of confidentiality regarding the information and instructions transmitted to the Franchisee.
- The scrupulous respect of your instructions regarding the rules established for the conditioning and maintenance of the premises within the parameters of the brand.
- Acceptance by the Franchisee of which products may be sold and the conditions under which they may be sold or offered.
- Designate advertising and promotional methods for all franchised establishments.
- Receive the payments agreed in the Franchise Agreement in the terms and conditions established and that the Franchisee respects the exclusive provisioning in its purchasing platform.
Duties of the Franchisor:
- The trademark offered to the Franchisee must be duly registered.
- Train the Franchisee in the use of the know-how associated with the brand.
- To have a sufficient infrastructure to be able to provide the Franchisee with continuous assistance in the management of its establishment.
- To offer purchasing agreements as beneficial as possible for the Franchisee.
- Prepare and update the Operations Manual.
- Have developed a pilot business (known as a “flagship”) that demonstrates profitability and success to the Franchisee.
- Not to grant franchises that do not comply with the territorial exclusivity commitment granted to the Franchisee.
The two approaches are complementary and necessarily compatible. At Navas & Cusi Law Firm we believe that a good relationship and understanding between both parties to the Franchise Agreement are essential for the success and profitability of the operation.