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Franchising in Spain

You may be asking yourself: what is franchising?

It can be thought of as a business arrangement where one party (the franchisor) grants another party (the franchisee) the right to use its trademark or trade name, as well as certain business systems and processes. There are three basic types of franchises:

  • Distributorships
  • Trademark or brand name licensing
  • Business format franchise

The Spanish Retail Trading Act regulates franchising in Spain. The contents of a franchise agreement must include:

  • The use of a common name, brand, or any other intellectual property right
  • The communication by the franchisor to the franchisee of certain technical knowledge
  • Technical or commercial assistance, or both, provided by the franchisor to the franchisee during the agreement, without prejudice to any supervision faculty to which the parties may freely agree in the contract

Pre-contractual Disclosure

In Spain, the franchisor must submit disclosure information at least 20 days prior to signing the agreement, or prior to any payment made by the franchisee to the franchisor. This information must be provided in writing, must be accurate and not misleading, and must include:

  • Identification of the franchisor
  • Justification of ownership or licence for use of any trademark or similar sign, including any judicial claims affecting them and the duration of the licence
  • A general description of the sector in which the franchise operates
  • The experience of the franchisor
  • The contents and characteristics of the franchise and its operation
  • The structure and extent of the network in Spain
  • The essential elements of the franchise agreement

How RDB Abogados Can Help

At RDB Abogados, we have dedicated personnel solely and exclusively focused on legal advice relating to franchise contracts, led by experts in this area. We assist our clients in the following ways:

  1. Advising on the steps required to carry out a franchise project, including the preparation and review of pre-contractual information required from the franchisee
  2. Preparing the necessary documents to register the franchise at the Franchisors' Registry
  3. Advising the franchisee in evaluating the benefits of a franchise agreement
  4. Negotiating, preparing, and drafting franchise contracts with a view to protecting our clients' interests
  5. Providing post-agreement and post-establishment advice
  6. Assisting in the resolution of any disputes that may arise
  7. Advising on tax and employment issues that must be considered from the outset of the contract

Franchising in Practice

Franchising is an extremely common way of doing business. It is difficult not to encounter examples of franchises in everyday life — well-known franchise businesses such as McDonald's and Subway operate across the United States and around the globe.

RDB Abogados Carrer Aragó 284 bis 2º 2ª, Barcelona, 08009 info@rdbabogados.com

This article does not constitute legal advice.

Disclaimer: The information set out in this text represents general guidelines provided by RDB Abogados. Detailed and specific advice must be obtained before taking any action in reference to this content, as explained more fully on the firm's website.