Underneath the Golden Boy - Robson Hall Faculty of Law

378 Underneath the Golden Boy
establishing, in greater detail, the conditions for establishing a franchise
contract, and defining the National Register of Franchisors. The principle of the
Register is vital because it establishes the rule that in order to function in Spain,
a brand name has been recognized and validated on the Spanish market. It is
impossible to allow a franchise system on the market on the basis of brands
submitted to the Patents and Brands Office if the brand name has not been
registered in the National or regional franchise register. 118
Article 3 of the Royal Decree expands the disclosure requirements
established in Act 7/1996. Under the Decree, upon issuing written disclosure, a
franchisor must promise that all information is accurate and truthful. A
franchisor or master franchisee must disclose information about the franchisor,
such as the registration address under the Franchise Registry. Moreover, proof
that the franchisor has all proprietary titles and licenses for the use of all of the
franchise’s trademarks and signs in Spain must be disclosed together with a
general description of the market in which the franchise operates. The franchisor
or master franchisee must also disclose all details pertaining to the development
of the franchise, all technical and commercial assistance that the franchisee will
receive, the characteristics of the know-how required, and an estimate of all
expenses necessary to render the franchise operational. A franchisee must also
be informed as to the size of the franchise system in Spain, including the number
of locations operating in Spain, distinguishing between those directly operated by
the franchisor and those ran by franchisees, indicating the population size in
which each franchise is located and the number of franchisees that have ceased
to belong to the franchise system in the previous two years, explaining whether
the contract was terminated upon completion of the agreement or for other
causes. Lastly, a franchisor or master franchisee must disclose all material facts
about the franchise agreement, including, inter alia, its duration and renewal. 119
Articles 5 and 6 of the Decree address the establishment of the Registry and
its functions. Article 5 requires franchisors intending to sell franchises within the
country to register with the Autonomous Government in the territory where
they are headquartered. Moreover, franchisors intending to do business in more
than one Autonomous Region must be included in the federal Register under
the Directorate General for Domestic Trade of the Ministry of Economy and
Finance. 120 Article 6 states that the Franchise Registry shall have the following
functions, among others: register all franchisors with the Autonomous
118
EFF, “Spain Legislation,” supra note 116.
119
Spain, Royal Decree 2485/1998, online: at Article 3 [Spain, Royal Decree 2485/1998].
120
Frank Zaid and Kendal Tyre, supra note 29 at A-12.