The lease-management agreement (location-gérance) — or free management — separates the ownership of the business from its operation. The owner keeps the business and receives a fee; the manager operates it in its own name, at its own risk, and alone bears the losses.
For a network head, it is an arrangement of considerable power. It allows a business to be operated by a third party who assumes its economic risk, while keeping control of the asset. And on termination it produces a mechanical effect: the business returns to the owner, with the attached clientele. The operator leaves without the business, without the premises — and, if it had invested, without its investment.
Two judgments of the social chamber shed light on its effects on employment. On 30 September 2020 (no. 18-24.881), the Court held that in the case of successive lease-management agreements, only the successive lessee-managers are bound by Article L. 1224-1, to the exclusion of the owner who never benefited from a return of the business. On 3 April 2024 (no. 22-10.261), it held conversely that termination of the agreement by the lessee-manager's liquidator entails the automatic return of the business to the owner, who must then take over the employment contracts.
This was Bernard Collorafi's status. The Paris Court of Appeal indeed describes him as such in its judgment of 8 March 2000, stating that the network head that brought about the lessee-manager's difficulties cannot, in bad faith, invoke the termination clause as having taken effect.