CC Academia Llongueras

Franchises

Code of conduct

1.- Definition of franchise

A FRANCHISE is a system for the selling of products and/or services and/or technologies based on a close partnership between financially separate and independent companies (1), the Franchiser and its Franchisees, in which the Franchiser possess the right and imposes upon its Franchisees the duty to run a company in accordance with its concepts (2). The right thus granted authorises and obliges the Franchisee to use, in exchange for a direct or indirect economic financial contributions, the brand of products and/or services, the know how (3) and other intellectual property rights, aided by the continued commercial and/or technical assistance, within the framework of a Franchise Agreement signed by the parties to this end.

2.- Guiding principles

  • 2.1.- The Franchiser starts up a Franchise Chain, constituted by it and its Franchisees, in which it must ensure its continuity (4).
  • 2.2.- The Franchiser must:
    • a) Have prepared and successfully operated a concept for a reasonable time and in at least one pilot centre prior to the launch of the chain (5).
    • b) Hold title to the rights over the signs that are distinctive to customers: trademarks and distinguishing signs (6), (7).
    • c) Provide its Franchisees with initial training and, similarly, continued commercial and/or technical training during the entire term of the Agreement.
  • 2.3.- The Franchisee must:
    • a) Make efforts to ensure the development of the Franchise chain and the maintenance of its common identity and reputation.
    • b) Provide the Franchiser with the operational bases to facilitate the determination of results and the financial statements required for the management of efficient administration. The Franchisee and/or its delegates to have access to its premises and accounting records during reasonable hours.
    • c) Not divulge to third parties the know-how provided by the Franchiser, either during or subsequent to the termination of the agreement (8).
  • 2.4.- Both parties must continuously comply with the following duties:
    • a) Act justly in their mutual relations. The Franchiser shall warn the Franchisee in writing of any infringement of the agreement and shall grant the latter, if justified, a reasonable period for making it good.
    • b) To resolve complaints and disputes loyally and in good faith, by means of direct communication and negotiation.

3.- RECRUITMENT, ADVERTISING/PUBLICITY AND DIVULGATION.

  • 3.1.- Advertising for the recruitment of Franchisees must be free from all ambiguity and misleading information.
  • 3.2.- Any advertising/publicity document directly or indirectly mentioning the provisional financial results of the Franchisee must be objective and verifiable.
  • 3.3.- So that the future Franchisee may make undertakings on a fully-informed basis, the Franchiser shall supply it with this Code of Conduct, as well as complete written information on the clauses of the Franchise Agreement, a reasonable period of time before the signing of said Agreement.
  • 3.4.- From the time the Franchiser proposes the signing of a preliminary agreement, the following principles must be respected:
    • Before signing any preliminary agreement, the future Franchisee must receive written information on both the contents of said agreement and the costs it must bear. If the Franchise Agreement is signed, disbursements shall be repaid by the Franchiser or shall be discountable against entry fees, as the case may be.
    • The duration of the preliminary agreement must be stipulated and an indemnification clause included.
    • The Franchiser may impose a non-competition and confidentiality clause to prevent deviation of the information transmitted during the duration of the preliminary agreement.

4.- SELECTION OF FRANCHISEES

The Franchisor shall select and not accept any Franchisees other that those that, after a reasonable interview, meet the necessary requirements (training, personal qualities, abilities, etc.) for the running of the Franchisee company..

5.- THE FRANCHISE AGREEMENT.

  • 5.1.- The Franchise Agreement must be in accordance with national law, European Community law and the Code of Conduct. The Agreement shall reflect the interests of the members of the Franchise chain, protecting the intellectual property rights of the Franchiser and upholding the common identity and reputation of the Franchise chain (9). Any agreement governing the relations between Franchiser and Franchisee must be drawn up in or translated by a sworn translator into the official language of the country in which the Franchisee is established. Copies of the signed contract shall be forwarded to the Franchisee immediately.
  • 5.2.- The Franchise Agreement must unambiguously define the duties and responsibilities of the parties, as well as any other collaboration clause.
  • 5.3.- Essential points of the Franchise Agreement:
    • Franchiser rights.
    • Franchisee rights.
    • Goods and/or services object of the Franchise.
    • Franchiser duties.
    • Franchisee duties.
    • Duration of the Agreement, in such a way that this permits the Franchisee to amortize the specific Franchise investments.
    • Agreement renewal conditions (10), as the case may be.
    • Conditions under which an assignment of agreement rights may be carried out and the preferential purchasing (pre-emptive) rights of the Franchiser.
    • Conditions of use of distinguishing signs: brand, trademarks, emblems, logos and others.
    • The right of the Franchiser to change the Franchise concept.
    • Causes for rescission of the Agreement.

In the case of rescission of the Agreement prior to the contemplated termination, conditions for the Franchiser recovering all the tangible and intangible items belonging to it (11).

MASTER FRANCHISE

This Code of Conduct is not applicable to the relations between the Franchiser and its Master Franchise.
However, it is applicable to the relations between the Master Franchise and the Franchisees.

ANNEXES

  • (1) The Franchisee is responsible for human and economic resources and, with regard to third parties, is also responsible for acts carried out within the framework of the Franchise.
    It has the duty to collaborate in securing the success of the chain of which it forms part.
  • (2) The “concept” is the combination of three (3) elements:
    • The ownership or right to use the distinguishing signs (trademark, signs, company name, trading name, symbols, logos).
    • The use of experience and know-how.
    • A range of products, services and/or technologies, patented or otherwise, which the Franchisers has created, developed or acquired.
  • (3) Definition of know-how::

    Know-how s a combination of practical, unpatented information arising from the Franchiser’s experience (and previously tested by it). It is secret, substantial and identifiable.

    "Secret", means that the know-how, either as a whole or in respect of its individual elements, is not generally known or easily accessible: this does not means that each of its components is completely unknown or that it is impossible to obtain them outside of the relationship with the Franchiser.

    "Substantial", means that the know-how must include important information for the sale of the products or the provision of the services to end users and, especially, for the presentation of the products with regard to the provision of the services, customer relations and administrative and financial management. The know-how must be useful for the Franchisee and be capable, at the date of termination of the Agreements, of improving the competitive position of the Franchisee, particularly, improving its results or helping it enter a new market.

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© 2011 C&C Academia Llongueras
Francesc Layret, 63-65 08911 Badalona (BCN)

Associaciació Catalana de Perruquers i Esteticistes Professionals


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