Franchising

Franchising

It is an atypical agreement, of American origin, widely used in Italian commerce, in the field of production, patents or other know-how. It can be defined as a fixed-term agreement for mutual counter-performances, by which the franchisor (licensor) grants, to the other enterpriser (franchisee), the right to sell its products, after use of the franchisor's trademark, as well as its distinguishing marks or an invention patent, know-how and its assistance. Therefore, an agreement is executed, which establishes the periodic fixed amount (front fee, entry fee or minimum amount) to be paid to the enterpriser and the additional fee which must be proportional to the turnover (royalty). In Italy, with Law 129/2004 it became part of our legal system under the name of “contratto di affiliazione commerciale” (franchise agreement).


Contracts