Franchise Contract – Summary of the Romanian regulation
Franchising is a very convenient way to open a business, given the advantages it presents. In Romania, the franchise has become increasingly popular as Romanians have recognized that it ensures for the business’ owner a concept already…
Franchising is a very convenient way to open a business, given the advantages it presents. In Romania, the franchise has become increasingly popular as Romanians have recognized that it ensures for the business’ owner a concept already known to the target audience that facilitates market entry, reduced risks as well as shared costs.
Franchising comes with significant advantages like rapid market entry, minimal risks for the franchisee who benefits from the franchisor's knowledge right from the start, having a well-designed marketing strategy or even the fact that being part of a franchise system also increases your bargaining power when obtaining capital from foreign investors. Given the many benefits, franchising has become a very common business method and it can even be concluded plastically that franchising means passing on to others how to succeed as we have succeeded, to repeat a success.
Definition
Romania is the second country in the world, after the United States, which has adopted a normative act regarding the legal regime of the franchise. The franchise contract was not actually introduced in the Romanian New Civil Code, it was regulated by the Government Ordinance no. 52/1997, subsequently republished in 2019. Franchising is a system of marketing products and/or services and/or technologies, based on continuous collaboration between legally or financially independent natural or legal persons, through which a person, called a franchisor, grants to another person, called a franchisee, the right and imposes the obligation to operate a business, in accordance with the concept of the franchisor.
Both the franchisor and the franchisee operate an enterprise, which means they are professionals within the meaning of Romanian civil law. Each of them acts in its own name and in its own interest, not being involved in a relationship of dependency or representation.
The franchise network comprises a set of contractual relationships between a franchisor and several franchisees, in order to promote a technology, a product or service, as well as to develop the production and distribution of a product or service. The franchisee is supported by the franchisor, through the continuous contribution of commercial and/ or technical assistance, within and during the franchise contract concluded between the parties.
General and special conditions
1. Considering the fact that the special legal provisions aforementioned do not make any reference to the general conditions which such a contract must comply with, we shall refer to the general provisions of the Civil Code: the ability to contract, the consent of the parties, a determined and legal object, a legal and moral cause. As for the form of the contract, it must be written, although this condition is not a requirement of validity, but comes in support of proving the negotiated and agreed elements, where appropriate.
