Local Market Analysis
- In a French franchising agreement, the state of the local market imposed by the “Doubin Law” must necessarily be included in the Disclosure Document under penalty of sentence by the judge of the franchisor to reimburse to the franchisee its book losses (under the form of damages). There’s an abundant set of precedents on the topic nowadays that everyone knows.
- As to international franchising, the analysis of the local market must be done by the master franchisee or the master licensee. Indeed, it’s the local partner who knows its market better than anyone. The relations between the franchisor and the master franchisee being more balanced, the master franchisee is thus inevitably more responsible from a legal point of view than a franchisee towards his franchisor. Indeed, the franchisee is only a small independent merchant who’s more subject to the “commercial seduction of the franchisor” than a foreign master franchisee, entrepreneur, businessman, group owner and thus hardened to negotiation. Besides, the precedents are much less numerous and often agree with the franchisor on the issue of the state of local market within the framework of a master franchise. (see “jurisprudence”: Geneviève Lethu, Spain).