Definition: Franchise agreement

Category: Distributive trade

"Franchise agreement" means an agreement whereby one undertaking, the franchisor, grants the other, the franchisee, in exchange for direct or indirect financial consideration, the right to exploit a franchise for the purposes of marketing specified types of goods and/or services; it includes at least obligations relating to: 

- the use of a common name or shop sign and a uniform presentation of contract premises and/or means of transport, 

- the communication by the franchisor to the franchisee of know-how, 

- the continuing provision by the franchisor to the franchisee of commercial or technical assistance during the life of the agreement.
European Union, Commission Regulation (EEC) No 4087/88 of 30 November 1988 on the application of Article 85 (3) of the Treaty to categories of franchise agreements