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Find Lawyers in Germany for Franchise Law

Practice Area Overview

Franchising is a popular distribution concept that enables the principal of a franchise system, the franchisor, to quickly roll out its business model in the market without investing into local points of sale. The franchisor concludes parallel franchise agreements with several franchisees, granting each of them the right to use its business concept, know-how, trademarks and other IP, for the distribution of specific goods and/or services, in exchange for a consideration, usually against payment of certain fees. The franchisees implement the franchisor’s business concept by setting up stores or other points of sale, as their own and independent business entities. With currently more than 1,000 different franchising systems operated in Germany, franchising ranks among the fast-growing business sectors.

Franchise contracts are complex bilateral agreements. They regularly comprise elements of know-how, trademark and other IP licensing, provisions on marketing and product distribution as well as multiple other aspects. Since franchise agreements are usually standardized contracts unilaterally prepared by the franchisor, special attention must be paid to the question whether the provisions contained in such agreements are admissible and valid under the statutory German regulations on general terms and conditions. In order to secure validity of the franchise contract and to avoid the imposition of fines by German authorities, franchise agreements also have to be in line with a number of relevant German and EU provisions on antitrust law, employment law, consumer protection and data protection and frequently also with industry-sector specific regulations.

Based on German case-law, disputes may arise whether a franchisee is entitled to payment of a statutory monetary compensation upon termination of the franchise agreement. 

Attorneys in the area of franchise law have to be familiar with different types of franchising systems. Frequently they have acquired specific industry knowledge relevant for the distribution of the respective products. The franchisor regularly needs strategic advice on the franchising structure, legal and practical advice with regard to the appropriate protection of his business concept and his IP, assistance with the drafting of franchising contracts, the negotiations with franchisees, the resolution of disputes arising during franchise relations and upon their termination. Franchisees typically require advice concerning the risks incurred in building up a self-contained business on the basis of a third party’s IP, assistance with the review of the franchise contract and also with all problems arising during the franchise relation and thereafter.
Hartwig Schmidt-Hollburg Leo Schmidt-Hollburg Witte & Frank Rechtsanwälte Partnerschaftsgesellschaft

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