Assistance to the franchisee in the search for premises and zone reservation contract

The accompaniment of the franchisor who has subscribed to an obligation to assist the franchisee in the search for premises must be up to his commitments.

In particular when the parties involved have not signed a zone reservation contract .

This is one of the lessons that can be learned from the judgment delivered by the Paris Court of Appeal on March 30, 2022.

In this case, under the terms of a DIP signed with two candidates, the franchisor undertook to assist the franchisee in the setting up of his restaurant and in his choice of location.

Two months after the signing of the pre-contractual information document and on the recommendations of the Franchisor " in order to reserve the area and quickly commit to a location ", a franchise contract was concluded between the parties.

This contract provided for the payment of an entrance fee (in the amount of 50,000 euros) and the opening of the restaurant within six months of its signature.

However, this deadline was not respected, the franchisees having been unable to obtain appropriate premises, in particular, for lack of financing from the banks, and this despite active steps.

Attributing their failure to the lack of assistance from the franchisor in finding locations and in supporting banks, the franchisees had notified the franchisor, in October 2017, of the termination of the contract and claimed, in vain, reimbursement of the right of 'hall.

The judgment of the Court of Appeal partially upholds the franchisees' claims.

Noting the absence of prior conclusion of a zone reservation contract, the Court considers that the fact that the contractual process did not provide for an intermediate phase of zone reservation allowing the candidate to carry out a market study before signing the contract franchise , contributed to the failure to open the restaurant within the expected time frame .

It thus condemns the franchisor to the payment of damages up to 30,000 euros, and to the payment of 12,000 euros under article 700 of the code of civil procedure.

However, it also pronounces the termination of the franchise contract at the shared fault of the parties, the franchisees having terminated the contract without prior notice to move towards another project, while the franchisor was willing to conclude an amendment to extend the search time.

This decision underlines the consideration by the judges of the following elements:

• The signature or not of a zone reservation contract , prior to that of the franchise contract, in the absence of a location already obtained by the franchisee;
• The effectiveness of the accompaniment of the franchisor , who when he is contractually committed to it, can hardly be limited to a few "remote advice" or "visits" at the request of the franchisee;
• The promises contained in the advertising documents can be taken into consideration by the judges: in this case, the existence of a brochure was noted mentioning: the preparation of the interview with the banks, the study of the commercial leases and pitches, lessor/transferor negotiations), the Court having held that these services had to be “up to the promises contained in the contractual and advertising documents”.

Paris Court of Appeal, Pole 5 – chamber 4, March 30, 2022, n°20/06507