News from La Presse: Tunisia's Franchise Law
Tunisia introduced a law on distribution trade in 2009, with Chapter 5 dedicated to franchising (Law No. 2009-69). This law was supplemented by Decree No. 2010-1501 of June 21, 2010, which sets out the minimum mandatory clauses of franchise contracts and the minimum data of the accompanying information document. Additional texts were adopted in 2015 and 2016 to better organize competition and prices, including franchising.
Definition of a Franchise Contract
The legislator defines a franchise contract as follows: "It is a contract by which the owner of a brand or commercial sign, called a franchisor, grants the right to exploit it to a physical or moral person, called a franchisee, for the purpose of distributing products or providing services in exchange for a fee. The right to exploit the franchise includes the transfer of acquired knowledge, know-how, and the exploitation of intellectual property rights."
Sectors Concerned by Franchising
According to the Ministry of Commerce, several sectors are concerned with the practice of franchising, including:
- Distribution trade, such as food products, perfumeries, beauty and cosmetic products, ready-to-wear, shoes, leather goods, shoe and sports articles, furniture, and computer equipment
- Services, such as car rental, hotel management, vocational training, repair and maintenance services, or thalassotherapy
Motivations for Investing in Franchises
According to a recent study, the primary motivation for investors to establish themselves through franchising is related to the brand image of the franchisor, which allows them to immediately benefit from an existing customer base. For the franchisor, this allows for rapid network development by sharing risks and benefits. Finally, for the consumer, a well-known brand offers a capital of trust that is not necessarily evident for a new brand that has just started.
Development of Franchises
The development of franchises is part of the modernization of commercial circuits, which encourages transparency and generates additional tax revenue.
