Underneath the Golden Boy - Robson Hall Faculty of Law

354 Underneath the Golden Boy
commits itself, through its membership, to the principles established in the
Code. 4
The Code contains conditions of membership to the EFF – including
acceptance without reservation of the Articles of the Federation and the rules
and regulations drawn up in accordance with the Articles – as well as demanding
that member Associations or Federations must require their member franchisors
to accept and comply with the European Code of Ethics on Franchising. 5 Part II
of the Code, last amended on 5 December 2003, contains the Code’s text. The
text contains a definition of franchising, guiding principles, clauses regarding
recruitment, advertising, disclosure, the selection of individual franchisees, the
franchise agreement, and the Code’s applicability to master franchise systems. 6
Among other things, the Code requires: (i) franchisors to provide franchisees
with initial training and continuing commercial and/or technical assistance
during the entire life of the agreement; 7 (ii) franchisees not to disclose to third
parties the know-how provided by the franchisor, neither during nor after
termination of the agreement; 8 (iii) that all parties exercise fairness in their
dealings with each other; 9 and (iv) that franchisees be given a copy of the Code
of Ethics as well as full and accurate written disclosure of all information
material to the franchise relationship, within a reasonable time prior to the
execution any binding documents. 10
Franchises are further regulated at the European Union level under
Commission Regulation (EC) No. 2790/1999 of 22 December 1999 on the
application of Article 81(2) of the Treaty to categories of vertical agreements
and concerted practices. The details on franchising appear in the Regulation’s
Guidelines on Vertical Restraints. 11 According to the Guidelines, Article 81
applies to vertical agreements that affect trade between member states and those
4 EFF, “Self-Regulation,” supra note 1.
5
European Franchise Federation, Code of Ethics, online:
[EFF, “Code of Ethics”] at Part I – III(b).
6
Ibid. at Part II.
7
Ibid. at Part II, s. 2.2.
8
Ibid. at Part II, s. 2.3.
9
Ibid. at Part II, s. 2.4.
10
Ibid. at Part II, s. 3.3.
11
European Franchise Federation, “Regulation at the European Union Level: exists in the
context of EU Competition Law only,” online: European Franchise Federation - Self Regulation
and Regulation [EFF, “Regulation at
the European Level”].