By nature, brands resort to franchising to deploy more quickly throughout a territory. Each franchisee operates in a geographically more or less extensive catchment area. Without constituting an obligation, the contract binding the two partners is likely to include a so-called territorial exclusivity clause, intended to provide a competitive advantage.
However, the candidate has an interest in specifying whether this clause only prohibits the installation of another member of the network in his area (relative exclusivity) or if it also prohibits the brand itself from opening a branch there (total exclusivity). But beware, the latter has the ability to reserve exclusion zones, such as stations, airports, shopping centers, within the territory granted to its co-contractor with the possibility of opening points of sale there. It is therefore necessary to take care to validate all these elements before the final signature of the contract which commits the two parties for several years!
A concept undermined by the rise of online sales
One question remains. Is the notion of territorial exclusivity not undermined by the spectacular explosion of online sales? “With e-commerce, franchisees run the risk of seeing themselves gradually dispossessed of their customers, which would be detrimental to their profitability and to the value of their business. Especially since case law does not see any “incompatibility between the operation by the head of the network of an e-commerce site and the attribution of territorial exclusivity to its affiliates”, warns lawyer Monique Ben Soussen, of the specialized firm BSM.
Faced with this revolution, most brands are converting to “omnichannel” and “phygital” (the combination of traditional stores and digital). But all is not so simple. “It is essential that the contract organizes the coexistence between online sales and physical stores within the network, continues Me Ben Soussen, in particular by providing for the terms of remuneration of the franchisee.
In addition, in terms of take-away sales, the key to the distribution of costs and revenues between the two protagonists responsible for ensuring in-store withdrawal or after-sales service must be specified.” In cases where there is no If there is no central e-commerce platform within the network, a franchisee is completely free to launch his own system via the Internet. A situation that is still exceptional, according to Me Ben Soussen. Setting up his own platform has indeed a high cost. , and also requires significant technical and human resources, an investment that is not within everyone’s reach.
Lighting by Me Régis Pihéry*
Me Régis Pihéry, lawyer at Redlink, member of the college of experts of the French Franchise Federation.
© / REDLINK
“The new European exemption regulation (n° 2022/720 of May 10, 2022) maintains the principle according to which the territorial exclusivity granted to a franchisee cannot be absolute. The head of the network cannot prevent the other members from carrying out “passive sales” (spontaneous requests from customers) in the co-contracting party’s territory. On the other hand, it may prohibit “active sales” there (targeting via price comparisons, advertisements on search engines). enshrines the principle that the head of the network cannot prevent its partner from using the Internet to sell goods or services.
In order to preserve the brand’s image and know-how, the franchisor has every interest in organizing online sales as well as possible. It can thus open spaces on its platform so that its franchisees can market their products and regulate the conditions for creating their own possible site.
* Lawyer for Redlink, member of the College of Experts of the FFF.
An article from the Franchise special issue of the Express. On newsstands March 16, 2023.