The German legalities in the real estate franchise
With the increased emergence of franchise companies in the second half of the 20th century, a new legal field was created in Germany as well as in the entire EU area, which up to now is made up of laws in different areas of jurisprudence. A concrete anchoring of the franchise contract in German law books does not exist. In this overview by Engel & Völkers you can find out which legal areas and how the practice is regulated in European franchise law.
As for any franchise system, the franchise agreement between franchisor and franchisee must also comply with certain legal criteria in the real estate franchise. In the absence of an explicit reference in German law, it is considered a mixed contract, which must withstand the typical requirements of a rental, purchase, loan and business agreement. The contract continues to be governed by the laws of cartel law, trademark law or licensing law. Since the content of franchise contracts varies depending on the type of company, and it is still a relatively new legal area, the decisions made so far by the highest judicial levels are given a high priority, which plays an important role in the drafting of franchise contracts.
European Code of Conduct for Franchising
With the EU antitrust law, franchisees operating throughout Europe are obliged to adjust their contracts as part of the EC block exemption regulation for vertical distribution agreements from the year 2000. From the original version of this regulation, essential elements of the so-called "European Code of Conduct for Franchising", a guideline for contracts established by the European Franchise Federation (EFF), have emerged. Engel & Völkers participates decisively in shaping the European franchise system and fully complies with the standards of the Code of Conduct. The election of Engel & Völkers CEO Kai Enders as President of the EFF in 2016 underlines the relevance we attach to a right-wing, fair and future-oriented approach as a continental and global franchisor.