Operating a franchise in France

In 2023, the food sector accounted for €32.45 billion of total sales of €99.49bn from franchised businesses.

Legal considerations

Franchising arrangements in France are governed by the French Commercial Code, particularly Articles L.330-1 and seq. and R.330-1 to R.330-2 and A.441-1, which regulate franchise disclosure and exclusivity undertakings. Contract law and competition law also apply, while case law applicable to these laws and regulations must also be considered.

Read more on international franchising

• Operating a franchise in the UK
• Operating a franchise in Germany
• Operating a franchise in Ireland
• Operating a franchise in Luxembourg
• Operating a franchise in Spain
• Operating a franchise in the Netherlands
• Operating a franchise in South Africa
• Operating a franchise in China
• Operating a franchise in Singapore
• Operating a franchise in Australia
• Operating a franchise in the UAE
• Operating a franchise in Saudi Arabia
• Operating a franchise in Qatar

Franchise agreements in France fall under the supervision of the Directorate General for Competition Policy, Consumer Affairs, and Fraud Control (DGCCRF). This authority not only conducts inspections and can impose sanctions but also provides guidance for franchisees and franchisors on various subjects, including insurance, taxation and customs regulations.

The French Commercial Practices Review Board (CEPC) also plays a role by issuing opinions on specific commercial practices, some of which are applicable to franchise agreements. These opinions are provided upon request from any individual or entity seeking clarification on French commercial law aspects.

The French Competition Authority may also review franchise agreements when they involve matters related to competition law.

The French Franchise Federation provides guidelines and promotes ethical franchising practices. At the international level, the European Franchise Federation and the WIPO also provide such guidelines.

There is no corporate structural requirement under French law to become a franchisor. A franchisor can therefore operate as an individual contractor or through various business entities, such as a société à responsabilité limitée (SARL), société par actions simplifiée (SAS), or société anonyme (SA). In addition, there is no requirement for the franchisor to be a local entity or wholly owned by nationals.

The same applies to franchisees, which can also choose from similar business entities, including SARL, SAS or SA, or acting as individual contractor. Like franchisors, franchisees are not required to be local entities or wholly owned by nationals.

Non-compete clauses are allowed during the franchise term. Post-term non-compete provisions are allowed according to article L.341-2 of the French Commercial Code, provided they are limited in scope and location and to a duration of one year, and justified by the need to protect know-how. The proportionality of post-term non-compete provisions is strictly controlled by French courts, and any breaching provision would be deemed unwritten.

Clauses imposing directly or indirectly minimum resale prices are prohibited under Article L.442-6 of the French Commercial Code.

Franchisors may nevertheless include in their contract maximum price clauses or recommended price clauses, which remain lawful as long as the franchisee remains free to set their own prices. French courts and authorities such as the French Competition Authority closely review these maximum or recommended price clauses to determine whether the franchisee is truly free or whether these clauses ultimately impose a resale price on the franchisee by, for example, setting the maximum price too low or introducing coercive measures by the franchisor if the recommended prices are not followed.

There are no specific restrictions on the term length or renewal length of franchise agreements, but they must comply with general contract law principles. Exclusivity undertakings are only permitted for a limited term of 10 years according to Article L.330-1 of the French Commercial Code.

Franchise agreements do not need to be registered with local authorities, though the relevant trademarks must be registered with the French IP Office (INPI) in case of French trademarks or the EU IP Office (EUIPO) in case of EU trademarks, and the trademark licenses associated with the franchise may be registered with the relevant IP Office if desired. Although there is no obligation to do so, it is highly recommended since the purpose of registration is the enforceability of the trademark license against third parties.

It is not mandatory for the franchise documents to be in French or translated into French. However, translation is strongly advised to evidence that the franchisee was provided with clear and understandable information before signing the franchise agreement.

Article L.330-3 of the French Commercial Code requires franchisors to provide a pre-contract disclosure document (DIP) at least 20 days before signing the agreement, and at least 20 days before the payment of any sum or investment in relation to the franchise relationship. The DIP must contain specific information as prescribed by article R.330-1 of the French Commercial Code. Any change of this information occurring between the provision of the DIP to the business partner and the execution of the agreement by the latter shall be provided to the business partner in writing prior to the execution of the agreement. This document does not need to be registered with any government authority. Failing to provide the DIP or providing an erroneous or outdated DIP is compensated by damages and it may also constitute a ground for terminating the agreement if the business partner demonstrates that this defect impaired its consent to enter into the agreement.

Intellectual property

Trademarks must be registered to be protected. French trademarks may be registered with INPI and EU trademarks via EUIPO. They are enforced under intellectual property laws.

A French or EU trademark registration lasts for 10 years and can be renewed for successive periods of 10 years subject to payment of renewal fees. If a trademark is not genuinely used for five successive years for the designated goods and services, it may be subject to forfeiture upon request from third parties, either globally or partially.

The owner of a registered trademark has exclusive rights to use the trademark and can sue anyone who infringes it. Under Article L.716-4-2 of the French IP Code, an exclusive licensee may also sue a third party for infringement if the owner does not file an infringement action within a reasonable period after being receiving notice to do so, while a non-exclusive licensee may only sue for infringement if it has the consent of the owner for starting such action unless provided otherwise in the license agreement. Similar provisions exist for EU trademarks.

If a trademark is unregistered, a party may act against a third party reproducing the same or similar terms or logo through an unfair competition action, but the level of evidence to demonstrate unfair competition is higher than for trademark infringement.

Patents are available under French law to protect innovative inventions; designs rights to protect the aesthetic aspects of goods; and copyright to protect original material. Patents and designs must be registered to be effective, other than for EU unregistered designs although this protection is limited. Copyright exists from the date on which an “original” work is created, according to French case law.

Trade secrets are defined under Article L.151-1 of the French Commercial Code as any information being secret, having commercial value due to said secret and being subject to reasonable measures taken to keep the information secret. Confidentiality undertakings are therefore crucial to preserve trade secrets as well as other relevant protective measures - for example encryption, sorting of the information provided, and use of confidentiality classifications.