⚠️ No part of this content can be understood as legal guidance

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It is common to complain about the confusion of the legal system in Brazil.

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This may be true elsewhere, but not in franchising, which is governed by a specific law, considered by many to be one of the most modern and efficient in the world.

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Therefore, if you choose to undertake the franchise model, you will be supported by clear, objective and improved rules.

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The law has two versions, one from 1994 and the most recent, from 2019.

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The 1994 version was considered excellent, but it still underwent adjustments to value best practices.

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The new law made even more evident the figure of the person who is offering the franchise, the franchisor, who must state in his Franchise Offer Circular (COF) his expectations regarding the franchisee in terms of expected profile, services, fees, renewals, transfers, and terminations.

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The past that condemns

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The franchise must present the full list of all the franchisees who disconnected in the last two years.

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All companies on behalf of the franchisor's partners and legal proceedings brought by the franchisor.

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Business model

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The franchisee has rights limited to their territory of operation.

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The territoriality clause, which defines the exclusive region of the franchised unit within the network, is more detailed, explaining the area, its degree of exclusivity considering sales online or abroad, as well as the rules of competition between units of the network.

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The franchise agreement does not presuppose a consumer relationship or an employment relationship, and can be understood as a balance between entrepreneurs.

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References

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Franchise Law

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Learn about the legislation that governs the franchise system

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What changes in practice with the new franchise law?

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ABF analyzes the “Third Year of the New Franchise Law”

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ABF debates advances and challenges in the 2 years of the new Franchise Law

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Courses

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Franchise practice

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Other chapters:

1. Presentation
2. From entrepreneur to entrepreneur
3. Reason for being of franchises
4. Law and Order
5. Where to start and how far you can go
6. Territories in franchises
7. Benefits of Geomarketing in the design of territories
8. Critical Analysis of Expanding a Network
9. Each one in its own square

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