The franchise market in Spain has shown sustained growth in recent years, consolidating itself as a popular and reliable business model.
In light of this, it is vital for those already existing in the sector, as well as those looking to enter the industry, to be aware of all their obligations as well as available protections to allow franchising to continue to thrive.
Legal considerations
Spain offers a franchise-friendly legal environment, with no requirements for franchisors or franchisees to be Spanish nationals or to establish local entities. Franchise agreements are governed by different laws, notably Article 62 of the Retail Commerce Regulation Act 7/1996 and Royal Decree 201/2010. While registration of the franchise agreement in Spain's Franchise Registry is not mandatory, franchisors must disclose certain core information about their operations.
Franchise agreements in Spain typically range from five to 10 years but can be negotiated freely between parties. Renewal must be explicitly agreed upon, with clear conditions to avoid abusive practices.
Disclosure is important and franchisors must provide a pre-contractual information document (DIP) at least 20 days before signing, detailing trade marks, network data, and estimated costs.
Competition law compliance and other standards
Spanish and EU competition laws prohibit fixed or minimum resale prices, though recommended and maximum prices are allowed under strict conditions. Non-compete clauses are enforceable during and after the franchise term, provided they are proportionate, geographically limited, and linked to the protection of intellectual property.
The Spanish Franchise Association (AEF) plays a pivotal role in promoting ethical standards and transparency. While its guidelines are not legally binding, they align with the European Code of Ethics for Franchising, fostering trust and professionalism across the sector.
Intellectual property
Trade marks are registered with the Spanish Patent and Trademark Office (OEPM) and can be extended to EU-wide protection through the European Union Intellectual Property Office (EUIPO). Franchisors should ensure trademarks are properly registered and licensed in franchise agreements. Trade mark infringement can be pursued through civil enforcement or opposition procedures. Strong trade mark protection safeguards brand identity in franchising. Proper use and control of trade marks within agreements are crucial.
Spain also offers robust protections for trade secrets, know-how, copyright, design rights and patents – all crucial elements in the franchising sphere.
Trade secrets protect confidential information about the business model, operating processes, and commercial strategies. They do not require registration but must be well documented in the franchise agreement. Copyright protections apply to operating manuals, training material, advertising and software used by the franchise. Unlike trade marks, copyright is automatically protected without the need for registration. Patents protect technical inventions used in the franchise, such as machinery, production processes or exclusive formulas. They are registered with the OPEM. Further, industrial designs protect the aesthetic appearance of the franchise’s products, furniture, or packaging. They are registered with the OPEM and can be extended to a European level through the EUIPO.
Additionally, franchise agreements include confidentiality and non-competition clauses to prevent misuse of intellectual property. Control and audit mechanisms can be established to ensure compliance.
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