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11 August 2015
The Macron Bill, which is related to growth and business and was expected to have a major impact on franchise networks, was adopted by the National Assembly earlier this year (for further details please see "New bill may thwart franchising in the retail sector"). At that time the assembly adopted a parliamentary amendment providing for, among other things, a maximum term of nine years for franchise agreements and the prohibition of post-contractual non-compete clauses.
The parliamentary process has now run its course and the bill became law on July 10 2015.
The final text steps back from the original bill in regard to distribution networks. One of the most debated points in the bill was the general limitation of the term applicable to agreements within a distribution network (whether under franchise or under the cooperative model) to nine years, irrespective of the market power of the franchisors or heads of distribution networks. The intense lobbying carried out by major cooperative retailers in France (particularly Leclerc) and certain franchise organisations (including the French Franchising Federation) has obviously been successful, since the nine-year limitation disappeared from the final text of the law. The government conceded that such limitation would have been both inadequate (as the amortisation of investments by franchisees and franchisors can sometimes take much longer than nine years) and useless, given that French and EU competition laws already set down certain limitations on the duration of vertical restraints.
As passed, the Macron Law has two main points:
These conditions are almost identical to those set out in Article 5.3 of the EU Block Exemption Regulation on Vertical Agreements (330/2010/EC). Therefore, the Macron Law adds nothing new in this respect. However, it may limit the scope of previous court decisions which were keen to accept longer post-term non-compete clauses in franchise agreements if they were proportionate to the interests to be protected and deemed necessary for the integrity of the franchisor's network.
Franchisees' organisations, which had strongly backed the initial parliamentary amendments, are disappointed by the final version of the Macron Law.
For further information on this topic please contact Raphael Mellerio at Aramis Law Firm by telephone (+33 1 53 30 7700) or email (email@example.com). The Aramis Law Firm website can be accessed at www.aramis-law.com.
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