Definition: Involvement of the enterprise in an association or co-operation agreement with other enterprises
This concept has been developed in relation to distributive trades NACE Rev. 1 Division 50 (Sale, maintenance and repair of motor vehicles and motorcycles; retail sale of automotive fuel), Division 51 (Wholesale trade and commission trade) and Division 52 (Retail trade; repair of personal and household goods).
For Division 50, it is necessary to distinguish between three types of association, concessionaires, dealerships and subsidiaries of motor vehicle producers:
- A concessionaire has the exclusive sales right or a commission on sales within a given territory. A concessionaire may also be a subsidiary of a motor vehicle producer (as also may be a motor vehicle dealer, although this is less likely),
- A dealer is involved in the sale of motor vehicles but does not have the rights of a concessionaire,
- A subsidiary is distinguished from an independent enterprise - majority control of independent owners - by the fact that it belongs to the group of a motor vehicle producer, resident or non-resident, who have externalised part or whole of their commercial activity by this means.
For Division 51, two forms of co-operation are possible:
- Enterprises which are very dependent on a single provider for all or the majority of their purchases. In the majority of cases, this enterprise is part of a franchise and is the franchisee. The supplier can be considered to have contracted out - formally or not - its wholesale activity and is often part of a franchise as the franchiser,
- Enterprises which are, in pursuance of a franchise agreement or a membership contract to a buying group, (one of) the wholesaler(s) in charge of supplying the franchisees or members of the group.
For Division 52, it is necessary to distinguish three types of affiliation:
- Affiliation to a buying group,
- Affiliation to a franchising chain,
- Affiliation to a consumer's co-operative.
The affiliation to a consumer's co-operative implies the right to a favourable supply of goods and the right to participate in the decisions of the co-operative, provided an interest in the corporate assets exists.
A buying group is a grouping of one or more enterprises set up in order to obtain from suppliers more favourable terms than each business could obtain on its own.
Franchising is a system of collaboration between two enterprises which are quite separate but bound by a contract (according to the European franchise charter) under which one of them (the franchiser) grants to the other (the franchisee), in return for payment of a fee, the right to use under specific conditions a trademark or caption characterised by a symbol, and also guarantees assistance and regular services intended to facilitate the use of the said trademark.
Several types of franchise can be distinguished according to their object: industrial franchise concerns the manufacturing of goods, distribution franchise concerns the sale of goods, and service franchise concerns the supply of services (definition given in Commission Regulation 4087/88/EEC of 30 November 1988).
Co-operative societies are bodies corresponding to the set of laws which in each country define the legal status of co-operation