Luxembourg has no particular legislation to govern franchise agreements, however, as an European Union founding member, the Grand Duchy has adopted the rules imposed by the European Franchise Federation. These types of agreements are considered “vertical” contracts which are based on the employment of intellectual property, business model or a company’s name. During the last few years, the franchise segment has started to compete with the opening of new companies in Luxembourg due to the fact that international brands are interested in accessing stable markets.
Our Luxembourg lawyers can offer more information on the legislation on franchise agreements available in the Grand Duchy.
A franchise can imply the use of the know-how of another company, as long as this is original, a business model used by the franchisor or even the brand of the franchisor in exchange for a fee and part of the returns of the franchisee.
There are three types of franchise agreements one can sign in Luxembourg:
No matter the type of franchise agreement, the franchisor is required to support the franchisee during the entire period of the contract. The support can take the form of technical assistance, training or even advisory services.
Considering several laws apply, among which the distribution and the intellectual property laws, one must pay attention to the content of the franchise agreement. A Luxembourg franchise contract must contain the following information:
You can also watch in the video below the main steps to draft franchise agreements in Luxembourg:
For assistance in drafting franchise agreements in the Grand Duchy, please contact our attorneys in Luxembourg.
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