Source: Vincent Pompougnac - Franchise Magazine
In a press release dated February 9, the Minister for the Economy clarified the spirit and scope of the contested amendment to the law that bears his name, dismissing the arguments of both franchises and cooperatives.
The French National Assembly has adopted a measure to regulate contracts between affiliated stores and chains," reminds Economy Minister Emmanuel Macron in a press release dated February 9. From now on, these contracts will be limited to 9 years, a period which will largely allow the chains' investments to be amortized, as long as the chain exceeds a sales threshold set by decree".
The amendment in question, number 1681, was strongly opposed by both the Fédération du commerce coopératif et associé and the Fédération française de la franchise. However, as Emmanuel Macron points out in his press release, the amendment was inspired by a 2010 opinion issued by the French Competition Authority, which considered that " affiliated stores are too often captive to the brand that groups them together" .
And that "numerous clauses in their contracts and bylaws hinder their mobility and strongly discourage them from changing brands, in particular the long duration of contracts". Or non-competition or non-reaffiliation clauses , which are now "deemed unwritten". Much to the dismay of some franchisespecialists , even if others are in favor of "more freedom".
For Emmanuel Macron, "the measure does not discriminate between different network categories"
"The freedom of independent retailers to modify their terms of affiliation at reasonable intervals, or even to change brands, will be a major factor in stimulating competition between brands in catchment areas, to the benefit of the French, who will enjoy gains in purchasing power and a diversified offer" , insists the Minister. For him, "the measure does not discriminate between different network categories".
"Retail groups operate either in the cooperative format or on the integration model. Most of the integrated groups also rely on franchising, particularly in the predominantly food retailing sector, for supermarket and convenience store formats," explains the Minister in support of his argument. All in all, independent retailers dependent on the major chains [sic], whether cooperative or franchised, account for almost half of the retail sector in France".
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