Getting The Deal Through Franchise 2015

Even Abogados is happy to inform you that a new edition on the series “Getting the Deal Through” has been recently published on Franchise 2015. Our Partner Ignacio Alonso has drafted the chapter related to Spain.

The book contains a detailed questionnaire for 29 different jurisdictions and permits to have a first approach to the subject not only in those countries but also to compare the regulations in each of them.

Besides some questions related to the general legal system (forms of business, formation of entities, restrictions to foreign investments, tax system amongst others), these are the main questions concerning the franchise:

What is the legal definition of a franchise?
Which laws and government agencies (if any) regulate the offer and sale of franchises?
What are the exemptions and exclusions from any franchise laws and regulations?
Does any law or regulation create a requirement that must be met before a franchisor may offer franchises?
Are there any laws, regulations or government policies that restrict the manner in which a franchisor recruits franchisees or selects its or its franchisees’ suppliers?
In the case of a sub-franchising structure, who must make pre-sale disclosures to sub-franchisees? If the sub-franchisor must provide disclosure, what (if anything) must be disclosed concerning the franchisor and the contractual or other relationship between the franchisor and the sub-franchisor?
What is the compliance procedure for making pre-contractual disclosure in your country? How often must the disclosures be updated?
What information must the disclosure document contain?
Is there any obligation for continuing disclosure?
How do the relevant government agencies enforce the disclosure requirements?
What actions can franchisees take to obtain relief for violations of disclosure requirements? What are the legal remedies for such violations? How are damages calculated? If the franchisee can cancel or rescind the franchise contract, is the franchisee also entitled to reimbursement or damages?
In the case of sub-franchising, how is liability for disclosure violations shared between franchisor and sub-franchisor? Are individual officers, directors and employees of the franchisor or the sub-franchisor exposed to liability? If so, what liability?
In addition to any laws or government agencies that specifically regulate offering and selling franchises, what are the general principles of law that affect the offer and sale of franchises? What other regulations or government agencies or industry codes of conduct may affect the offer and sale of franchises?
Other than franchise-specific rules on what disclosures a franchisor should make to a potential franchisee or a franchisee should make to a sub franchisee regarding predecessors, litigation, trademarks, fees etc, are there any general rules on pre-sale disclosure that might apply to such transactions?
What actions may franchisees take if a franchisor engages in fraudulent or deceptive practices in connection with the offer and sale of franchises? How does this protection differ from the protection provided under the franchise sales disclosure laws?
Legal restrictions on the terms of franchise contracts and the relationship between parties in a franchise relationship
Are there specific laws regulating the ongoing relationship between franchisor and franchisee after the franchise contract comes into effect?
Do other laws affect the franchise relationship?
Do other government or trade association policies affect the franchise relationship?
In what circumstances may a franchisor terminate a franchise relationship? What are the specific legal restrictions on a franchisor’s ability to terminate a franchise relationship?
In what circumstances may a franchisee terminate a franchise relationship?
May a franchisor refuse to renew the franchise agreement with a franchisee? If yes, in what circumstances may a franchisor refuse to renew?
May a franchisor restrict a franchisee’s ability to transfer its franchise or restrict transfers of ownership interests in a franchisee entity?
Are there laws or regulations affecting the nature, amount or payment of fees?
Are there restrictions on the amount of interest that can be charged on overdue payments?
Are there laws or regulations restricting a franchisee’s ability to make payments to a foreign franchisor in the franchisor’s domestic currency?
Are confidentiality covenants in franchise agreements enforceable?
Is there a general legal obligation on parties to deal with each other in good faith? If so, how does it affect franchise relationships?
Does any law treat franchisees as consumers for the purposes of consumer protection or other legislation?
Must disclosure documents and franchise agreements be in the language of your country?
What restrictions are there on provisions in franchise contracts?
Describe the aspects of competition law in your country that are relevant to the typical franchisor. How are they enforced?
The court system. What types of dispute resolution procedures are available relevant to franchising?
Principal advantages and disadvantages of arbitration for foreign franchisors considering doing business in your jurisdiction.
In what respects, if at all, are foreign franchisors treated differently from domestic franchisors?