Collo vs McDo

Legal concepts

The catchment area

The geographical area from which a point of sale draws its customers. A commercial notion, not a legal one — and yet at the heart of franchise disputes.

In brief

  • No general statutory definition. The term appears in law only in commercial planning (Art. L. 752-6 of the Commercial Code).
  • Territorial exclusivity is not of the essence of the franchise agreement: it must be stipulated. Failing that, the franchisee has no right over its area.
  • The pre-contractual disclosure document must present “the general and local state of the market” (Art. R. 330-1) — but the franchisor does not have to carry out the candidate's market study.
  • Cass. com., 14 March 2006 (no. 03-14.639): exclusivity “in a specified sector” does not prohibit the franchisor from opening a website under the same trade name.

The catchment area is a marketing tool: it is measured in travel time, divided into primary, secondary and tertiary zones, and a potential turnover is deduced from it. The law does not define it.

Yet it becomes the central issue in many franchise disputes, in a roundabout way: the franchisee who sees another outlet of the same network open nearby suffers internal competition, which cuts into its turnover while it continues to owe its fees.

The law gives it little purchase. Territorial exclusivity must be stipulated in the agreement; failing that, it does not exist. The franchisee then only has a claim on the ground of good faith, or of defective consent at the time the contract was formed.

That is precisely what Bernard Collorafi challenged in 1997, when McDonald's was considering an opening in Vallauris — and the company replied to him in writing that his agreement contained no territorial exclusivity.

Sources

External sources.

  1. Commercial Code, article R. 330-1 (content of the DIP) — Légifrance
  2. Cass. com., 14 March 2006, no. 03-14.639 (published) — Légifrance

Where this comes up in the case file

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