Parties’ obligations in the Franchise Agreement (Arabic Language)
This training course focuses on the parties’ obligations in a franchise agreement, an agreement between two parties (legally and economically independent) by which one parties (the “franchisor”) grants the other party (the “franchisee”) the right to use one or more of his intellectual or industrial rights or the technical knowledge to produce the commodity(ies) or distribute the product(s) or offer the service(s) under the trademark the franchiser produces or that the franchisor uses and according to his instructions and under his supervision exclusively in a specific geographical area and for a specific period of time. The franchisor shall be committed to provide the technical assistance in exchange of a sum of money or of common economic interests.
We will address the obligations of each party in the franchise agreement:
Concerning the obligations of the franchisor:
The franchisor’s obligations in the franchise agreement are divided into two categories, the essential obligations and the secondary obligations which presence is optional for the contracting parties.
• In a first stage, we will address the following essential obligations:
1- Obligation to assist and inform: we will define its legal basis, its content and its source in the franchise agreement.
2- Obligation of technical assistance, conveying success, its forms, how to achieve it in practice and its benefits.
• In a second stage, we will address the following secondary obligations:
1- The obligation arising from the exclusivity clause: The franchisor’s abstention from dealing with anyone outside the franchisee network and the consequent obligation of the franchisor to prevent competition, and the consequences of violating this principle, especially if this breach came from a third party.
2- The obligation of exclusive sale and exclusive supply imposed by the franchisor: its characteristics and its extent, is it from the essence of the contract or can it be bypassed by the agreement of the two parties?
The franchisee’s obligations are as follows:
1- Obligations arising from the conclusion of the contract.
2- The franchisee is obliged to respect the franchisor’s rules, including choosing the store location, conditions for its concept design, how to display products, commitment to advertising campaigns, and adopting a method approved by the franchisor … To achieve this, the franchisor has the right to control and verify how this right is implemented. The main issue in this context is the extent of the right of the franchisor to impose specific prices on the franchisee.
3- The franchisee devotes his time and professional activity to the franchisor and the marketing of the latter’s products and works to develop the network more and more.
4- Obligations arising from the expiry of the contract, including: the obligation to maintain and protect confidentiality and the obligation of non-competition after the contract ends.
5- Finally, there is the obligation that distinguishes the independence of the franchisee towards others, that is the obligation of information through which the franchisee is obliged to disclose the termination of the franchise agreement, and the fact that he is completely independent in his work from the franchisor.