<\/p>\n\n\n\n
Franchising is defined as an agreement that includes \u201clicenses of intellectual property rights, including trademarks or distinctive signs and know-how for the use and distribution of goods or services<\/em>[1]<\/a>\u201d.<\/p>\n\n\n\n The purpose of a franchise agreement is to allow a franchisee to implement a know-how associated, on the one hand, with the provision of distinctive signs and, on the other and, with commercial and\/or technical assistance. The franchisor\u2019s know-how is defined as \u201ca package of non-patented practical information, resulting from experience and testing by the franchisor, which is secret, substantial and identified<\/em>[2]<\/a>\u201d.<\/p>\n\n\n\n By \u00ab secret<\/em> \u00bb it must be understood that the know-how will generally not be known or easily accessible;<\/p>\n\n\n\n The \u201csubstantial<\/em>\u201d nature of the know-how means that it must be \u201csignificant<\/em>\u201d and \u201cuseful<\/em>\u201d to the franchisees who will be able to use it in the re(sale) of products and\/or services covered by the franchise agreement;<\/p>\n\n\n\n Finally, the term \u201cidentified<\/em>\u201d means that the know-how must be described in a sufficient manner to verify whether it meets the conditions of confidentiality and substantiality. <\/p>\n\n\n\n The words \u00ab experienced, renewed, profitable and lawful<\/em>\u201d may also be used to describe the franchisor\u2019s know-how. However, they are complementary and not strictly necessary to the qualification of the agreement.<\/p>\n\n\n\n The transfer of this know-how is essential for the qualification of the agreement as a \u201cfranchise agreement<\/em>\u201d and justifies in particular, the payment of entry fees and royalties by the franchisee(s).<\/p>\n\n\n\n In a nutshell, the know-how is a set of commercial, technical, logistical, informatic and\/or management methods (\u2026) tested and experimented by the franchisor. This know-how is difficult to access by someone outside the network, provides a competitive advantage and is identified\/written down in an operating manual (also called \u201cbible\u201d).<\/em> In practice, the transfer of know-how from the franchisor to the franchisees often results in training obligations and technical and\/or commercial assistance.<\/p>\n\n\n\n Therefore, a training obligation in the contract, insofar as it allows the transfer of know-how, will be decisive for the qualification of the agreement as a \u201cfranchise agreement<\/em>\u201d.<\/p>\n\n\n\n A Court of Appel [3]<\/a>was able to note, with regard to a two-day training session included in an agreement improperly referred to as a \u201cconcession contract\u201d, that:<\/p>\n\n\n\n \u201c(\u2026) by this training obligation, the company (\u2026) undertook to transmit its know-how in the field of air conditioner disinfection and cleaning; because of this transmission of know-how, the contract must consequently be qualified as a franchise contract and not as a service concession contract or a selective distribution contract<\/em>\u201d.<\/p>\n\n\n\n It follows that know-how and its transmission are indeed decisive elements in the qualification of a \u201cfranchise contract<\/em>\u201d (and therefore distinguish it from other \u201crelated\u201d contracts).<\/em><\/p>\n\n\n\n It is to be noted that a \"technical<\/em>\" training, which could have been acquired through practice and\/or experience, cannot characterize a know-how as described above.[4]<\/a> The Paris Court of Appeal [5]<\/a>considered that the franchisor was not required to make available to its franchisees a \"technological evolution<\/em>\" since it was not included in the know-how.<\/p>\n\n\n\n Technological evolution (such as the development of a mobile application for online ordering)<\/em>, not integrated into the know-how, does not oblige the franchisor to transmit it to its franchisees.<\/p>\n\n\n\n If, on the other hand, this technological evolution were to be considered as an update of the know-how, the franchisor would then be obliged to transfer it to the franchisees of his network.<\/p>\n\n\n\n Particular attention must therefore be paid to documenting and securing your know-how (to be set apart from other information transmitted within the framework of an agreement, whether confidential or not<\/em>) and your activities, as well as when entering into contracts with your partners.<\/p>\n\n\n\n Indeed, it results from several decisions that the transmission of a know-how is likely to lead to a requalification of your contracts, independently of the titles which would be attributed to them.<\/p>\n\n\n\n The lack of transmission of your know-how could therefore lead to the requalification of your franchise agreement as a simple license agreement, for example.<\/p>\n\n\n\n Such a requalification would have serious consequences, particularly in terms of obligations and responsibilities.<\/p>\n\n\n\n REGIMBEAU has a competent and experienced Contracts, IP Valuation & Data Department and is at your disposal to discuss this matter. [1]<\/a> Guidelines on Vertical Restraints of June 28, 2022<\/p>\n\n\n\n [2]<\/a> Definition of the EU Regulation 2022\/720 of the Commission of 10 May 2022<\/p>\n\n\n\n [3]<\/a> Court of Appeal of Aix-en-Provence ch. 3-1, Sept. 23, 2021, n\u00b0 18\/02584<\/p>\n\n\n\n [4]<\/a> CA Poitiers, November 24, 2020 n\u00b019\/02311<\/p>\n\n\n\n
<\/p>\n\n\n\nThe notion of know-how<\/strong>
<\/h3>\n\n\n\n
<\/p>\n\n\n\nThe transmission of know-how & obligations of the franchisor<\/strong>
<\/h3>\n\n\n\n
<\/p>\n\n\n\nModification and\/or improvement of the know-how during the execution of the contract<\/strong>
<\/h3>\n\n\n\n
<\/p>\n\n\n\n
\n\n\n\n
<\/p>\n\n\n\n