Allow our expert contract lawyers to draft your franchise’s franchise agreements. German law allows for non-negotiable franchise agreements, and standard contracts have advantages for franchisors who wish to have the same terms and conditions for all franchisees.
However, careful legal analysis needs to be considered as if the franchise agreement is overly limiting regarding the franchisee’s freedom; there is a danger that the franchisor could be viewed as the “employer” of the franchisees.
The franchise agreement is the legal basis of the franchise system and states the parties’ rights and obligations. This franchise agreement as a contract is one of a continuing obligation (§ 314 BGB), which is a continuous contractual relationship with ongoing obligations arising between the parties. Furthermore, as a mixed contract, the franchise agreement can include elements of the purchase, rental and lease contract and a service and agency contract. These contracts concern various areas of law such as competition, copyright, and trademark. Depending on the industry and the type of franchise system, the form of the contract can vary greatly.
Such franchise agreements must be valid under German law and apply the requirements for “general terms and conditions” as they are subject to statutory regulations under §§ 305-310 BGB. The terms and conditions within the franchise agreement should be clear and reasonable, as unclarity can cause difficulties in future legal disputes, and reasonableness applies in situations such as limiting liability in different circumstances.
Franchise agreements are also subject to the principle of dealing in “good faith” (§ 242 BGB), with German courts developing individual obligations from this principle concerning franchises. For example, pre-contractual disclosure obligations and that the franchisee carries a duty to promote sales.
Other vital clauses within German franchise agreements which need to be considered include non-competition and non-solicitation clauses.
Our German lawyers will analyse your franchise agreements’ requirements and provide straightforward counsel regarding what is allowed under German law and the risks involved with certain decisions. Once we have established the needs of the franchise alongside its goals and characteristics, our expert team will appropriately draft the franchise agreements.
Allowing our team to carry out this task ensures that your franchise can continue its daily business, knowing it is on legally solid ground.