Franchising contract – Wikipedia

The franchise contract It is a type of contract introduced in the Italian legal system by law 6 May 2004, n. 129.

According to article 1 of law 129/2004, on the basis of it, a party grants the availability, towards consideration, of a set of industrial or intellectual property rights relating to brands, commercial denominations, signs, utility models, drawings , Copyright, know-how , patents, assistance or technical and commercial consultancy, inserting the affiliate in a system consisting of a plurality of affiliates distributed in the area, in order to market certain goods or services.

According to the standard, the fundamental elements are:

• The know-how , as a secret, substantial and identified heritage of unbalanced practical knowledge;
• the right of entry ( entrance fee ), as a fixed figure that the affiliate pays at the time of the signing of the franchise contract;
• the royalty , as a percentage commensurate with the turnover or at a fixed altitude, periodically due to the fictional;
• Handling assets, the assets produced by the fragant or according to its instructions are marked by the name of the affiliate.

Form and content of the contract [ change | Modifica Wikitesto ]

Art. 3 of law no. 129/2004 provides that the contract of franchising should be stipulated in writing under penalty of nullity.

The contract of franchising , pursuant to the aforementioned art. 3 must expressly indicate:

1. the amount of the initial investments and any entry expenses;
2. the methods of calculating and payment of the royalty and the possible indication of a minimum collection to be achieved by the affiliate;
3. the scope of any territorial exclusive;
4. the specific description of the know-how ;
5. the indication of technical and commercial assistance services, design and set -up and training offered by the fictional;
6. the conditions of renewal, termination or possible transfer of the contract;
7. The duration that, if it is agreed on a fixed term, must not be less than three years.

With reference to the content of the franchise contract, as typified by the legislator, it remains to be understood which fate is up to franchise contracts stipulated in writing that defects any of the elements indicated by art. 3 of law no. 129/2004 (for example that defects of the indication of the amount of the initial investment, moreover, often, dependent on entrepreneurial choices directly remitted or indicating the renewal conditions). It remains, that is, to understand if the parties, in their negotiating autonomy, can create atypical contractual patterns that differ from the typing of the contract of franchising proposed by the legislator.

Information obligations against the fictional [ change | Modifica Wikitesto ]

The legislator has also placed specific pre -contractual information obligations, imposing to provide to the potential affiliate, at least thirty days before the stipulation, a copy of the contract accompanied by a series of documents:

1. the main data relating to the framing and, upon request, a copy of its financial statements of the last three years;
2. the indication of the trademarks used with the relative justifying title (registration, deposit, license granted by third parties or documents proving concrete use);
3. a synthetic description of the elements characterizing the activity subject to the contract of franchising ;
4. the list of current affiliates and the variation of the same in the last three years;
5. the synthetic description of any judicial proceedings against the framing.

Further obligations to be paid by the parties [ change | Modifica Wikitesto ]

Articles 5 and 6 of law no. 129/2004 place deals with affiliate and affiliated further obligations that can be considered an expression of the general principle of respect for correctness and good faith in the context of negotiations and in carrying out the relationship.
In particular:

• There is an obligation to confidentiality to be paid by the effectiveness e
• an obligation of information to be paid by the fictional;
• The affiliate cannot transfer the headquarters, if it results from the contract, without the prior consent of the effectiveness, except for causes of force majeure.

False information and cancellation of the contract [ change | Modifica Wikitesto ]

The behavior of the fictional that provides false information to the affiliate is qualifiable as a malicious behavior and, pursuant to art. 1439 of the Italian Civil Code, may determine the cancellation of the contract on the application for the effectiveness.

This specific sanction provided for the case of false information leaves, however, the question relating to the consequences is open, not already of false information but, and it is certainly the most frequent case, of omitted information or reticence. In this case, it could hypothesize a contractual breach and the possibility of terminating the contract if the non -fulfillment is configured as “of no small importance”, had an account of the interest of the affiliate (art. 1455 of the Italian Civil Code).