The post-contractual non-reaffiliation clause plays a key role in protecting franchisors’ networks and know-how.
It aims to prevent franchisees from joining or creating another competing network after the end of their franchise contract.
Since August 6, 2016 (the date of entry into force of the « Macron Law » of August 6, 2015, which codified and clarified the applicable regime), four cumulative conditions shall be met (cf. article L. 341-2 of the French Commercial Code):
- The clause shall prohibit the franchisee from joining a competing network – and not any franchise network.
- The clause shall apply only to the premises where the franchisee operated its business.
- The clause shall be essential to protect the franchisor’s know-how.
This criterion implies that the non-reaffiliation obligation applies only to persons likely to disclose or exploit the franchisor’s know-how.
For example, the clause is invalid if it applies to « any natural person or legal entity having at any time during the performance of the contract exercised functions in or for the franchised company » and to « any universal or individual successor in title« .
- The ban on non-reaffiliation must be for a maximum of one year from the date of termination of the franchise agreement concerned.
In a recent ruling, the French Supreme Court (Cour de cassation) indicated that these conditions are applicable to any network operating a business selling goods to consumers or services to individuals, such as a real estate agency (Cass. com., June 5, 2024 n°23-15.741).