Franchisor’s obligations

Franchisor’s obligations

Every franchisor is subject to a certain number of obligations, the respect of which is necessary to ensure the sustainable development of the network and the establishment of peaceful relations with all the franchisees.

1. First of all, before signing the franchise agreement, the franchisor must ensure that the following points are complied with:

  • test the concept they wish to develop within the framework of a franchise network, generally through at least one or two owned-operations (through branches or subsidiaries)
  • formalize its know-how in writing, in order to be able to make it available to its franchisees. This formalization is generally carried out through the drafting of a know-how manual, also known as an “operating manual”, “bible”, which combines the aspects of the franchisor’s know -how, from the layout of the sales outlet to its operation, both operationally and with regard to customers.
  • protect its brand, by ensuring it is registered for the categories of products and services concerned, and the countries in which the future franchise network is to develop.
  • design the supply of future franchisees, by defining the products and services specific to the network, and the terms of their transmission of the franchisees (central purchasing office, central referencing office).

2. After the signing of the franchise agreement, the franchisor must make available to its franchisees :

  • a brand name, which will be the common banner under which all the members of the network will be identified, and which will contribute to the development of the network’s reputation, and thus to its influence with regard to the end customers.
  • a know-how, through the handing over of know-how manuals, but also within the framework of a material initial training, which will often include a theoretical aspect (explanations relating to the standards) and a practical aspect (practical implementation in sales outlets). The transfer of know-how also generally includes assistance during the opening of the sales outlet, on the premises of the new franchisee.
  • an ongoing assistance, throughout the contractual relationship, enabling the franchisee to implement the know-how in the best possible way, and to respond to the franchisee’s requests relating to the concept. This assistance will take the form of occasional visits, training seminars, the provision of communication tools, the organization of committees on topics of interest to the network, etc.
  • supplying the franchisees with specific products, with the franchisor having the choice of either selling the specific products to the franchisees, or selecting suppliers who can supply them to the franchisees.

Becoming a franchisor is, therefore, not easy, and involves defining a real strategy beforehand!


Becoming a franchisor

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