The franchise is an unnamed contract: the French legislature has never defined it. The only specific statutory framework is the pre-contractual disclosure obligation stemming from the loi Doubin (Article L. 330-3 of the Commercial Code), which, moreover, does not target franchising as such, but any provision of a trade name coupled with an exclusivity commitment.
The usual definition therefore comes from European competition law and case law. Regulation (EEC) No 4087/88 of 30 November 1988, applicable throughout the Antibes dispute, defined the franchise agreement and required know-how that was “secret, substantial and identified”. This regulation was repealed at the end of 1999; the current text, Regulation (EU) 2022/720, no longer even uses the word “franchise” and treats these agreements as ordinary vertical agreements.
The economic consideration for the fees is the know-how and the assistance. That is why franchise disputes so often turn on the same question: did the franchisee receive what it is paying for?
Two landmark judgments of the commercial chamber frame the formation of the contract. On 4 October 2011 (no. 10-20.956), the Court of Cassation (France's highest court) held that a considerable gap between the forecasts provided and the actual results may constitute a fundamental mistake as to profitability — even without fault on the part of the franchisor. On 26 June 2024 (no. 23-14.085, published), it held that a formally compliant disclosure document does not provide immunity against fraud by concealment.