The franchise agreement has no specific legal regime under French law. It is governed by the general law of contract, with one exception: a pre-contractual disclosure obligation, created by Law no. 89-1008 of 31 December 1989, known as the “loi Doubin”, after François Doubin, then Minister for Trade and Crafts.
The text
Article 1st of this law was codified in 2000 as article L. 330-3 of the Commercial Code. Beyond franchising alone, it covers any provision of a trade sign, trademark or trade name coupled with an exclusivity or quasi-exclusivity commitment:
“Any person who makes available to another person a trade name, trademark or trade sign, while requiring from that person an exclusivity or quasi-exclusivity commitment for the exercise of its activity, is required, prior to the signature of any contract concluded in the common interest of both parties, to provide the other party with a document giving truthful information, enabling it to commit with full knowledge of the facts.”Commercial Code, article L. 330-3, 1st paragraph
This document - the pre-contractual disclosure document, or DIP (document d'information précontractuelle) - must be provided, together with the draft agreement, at least twenty days before signature, or before any payment of money if a sum is required in advance, for example to reserve an area.
What the DIP must contain
The content is laid down by decree, now article R. 330-1 of the Commercial Code. It lists in particular:
- the identity of the business, its legal form, its capital, its bank details;
- the registration of the trademark and, if it is used under licence, the term granted;
- the date the business was founded and the main stages of the network's development, the general and local state of the market, the annual accounts for the last two financial years as an annex;
- the presentation of the network: list of businesses, addresses of outlets bound by a contract of the same kind (limited to the fifty nearest if the network has more than fifty operators);
- and above all, under 5° c), the number of businesses that have left the network in the past year, specifying whether the contract expired, was terminated or was annulled;
- the term of the agreement, its conditions of renewal, termination and assignment, as well as the scope of the exclusivities;
- the amount of specific expenditure and investment to be committed before opening.
The disclosure of departures from the network, with their reasons, is what exposes a brand's attrition and litigation to a candidate. Breach of the obligation is a fifth-class petty offence (article R. 330-2 of the Commercial Code).
The point often wrongly taken for granted
Failure to provide a DIP does not automatically render the agreement void. The commercial chamber of the Court of Cassation so held in a landmark judgment of 10 February 1998 (appeal no. 95-21.906, published in the bulletin), delivered in a case concerning lessee-managers: the trial judges had to examine “whether the lack of information had the effect of vitiating the consent” of the persons concerned.
In other words, a franchisee who relies on the absence or inadequacy of the DIP must still show that, had it been correctly informed, it would not have entered into the contract, or would have done so on substantially different terms. The sanction falls under defects of consent - mistake or fraud -, which the Civil Code makes a ground for relative nullity (articles 1130 and 1131).
Case law has clarified the scope of this requirement:
- Com., 4 October 2011 (no. 10-20.956): a considerable gap between the forecast provided by the franchisor and the actual results may amount to a fundamental mistake as to the profitability of the business - without it being necessary to establish a formal breach of the loi Doubin or fraud.
- Com., 26 June 2024 (no. 23-14.085, published): a formally compliant DIP does not shield the franchisor. The judges had to examine whether the head of the network had not “intentionally remained silent about the insolvency proceedings that occurred in the network after the DIP was provided and before signature”.
What this means for the case file
Bernard Collorafi signed his first agreements with McDonald's in 1987, that is before the entry into force of the loi Doubin, applicable from 2 January 1990. The Antibes dispute therefore did not turn on this ground, but on the performance of the agreement and good faith in the implementation of the termination clause.
The specialist press included in the case file does, however, show how the loi Doubin was understood and taught around the turn of the 2000s, notably in the glossary of L'Officiel de la Franchise, which defines refusal to sell and the loi Doubin, and in the franchise dictionary published in the same magazine. The question of the franchisee's real room for manoeuvre was raised as early as 1996 by the PME & Affaires investigation into independence and dependence.
What the document does not guarantee
The law requires a presentation of “the general and local state of the market”. This is not a market study, and the franchisor does not have to carry out the candidate's study: it informs, the other party decides. A candidate who wants to know the real potential of their location must measure it themselves - and the catchment area in which they set up is secured for them only if the agreement expressly provides for territorial exclusivity. Otherwise, nothing prevents the network from opening nearby.
Nor does the law say anything about know-how, which is nonetheless the economic consideration for the fees. This concept comes from European law, which requires it to be secret, substantial and identified.
Finally, the disclosure obligation ends at signature. What then governs the relationship is good faith: the requirement, now a matter of public policy, that agreements be performed fairly. It is on this ground, and not on that of the loi Doubin, that the Antibes case was played out.