The pre-contract obligations regarding the franchising agreement

• Author: Dan-Alexandru Sitaru
• Position: Lecturer, PhD, Faculty of Law, 'Nicolae Titulescu' University of Bucharest
• Pages: 52-59

LESIJ NO. XX, VOL. 2/2013

THE PRE-CONTRACT OBLIGATIONS REGARDING THE

FRANCHISING AGREEMENT

Dan-Alexandru SITARU*

Abstract

The current paper puts into context the Government Or dinance no. 52/1997 regarding franchising

with the new concepts of the Civil Code. Thus, under the old Civil Code there were no specific regulations

that could be a pplied to a pre-contr actual obliga tion of the parties. Dur ing any negotia tion, because the

parties sent each other a ser ies of offers, counter offers, and in the end decided whether to agree or not, some

parts of a professional secret, know-how, or any other important information for one or both might be

revealed to the other. Under i nternational laws, such as the one in F rance, or by using inter nationally

established unwritten law, such as the Fra nchising Model Contr act by the Inter national Chamber of

Commerce and Arbitration in Paris, such a disclosure of important or secret information is pr otected from

future unauthorized usage by any par ty or a ffiliate if the contract is not signed. In the view of the new Civil

Code, this stage in the development of an agr eement, not yet binding, is now regulated and protected.

Keywords: franchising, fra nchisor, franchisee, business model, professional secret.

Introduction

The new civil code did not also include to its regulations the franchising agreement. Despite

the same includes most of the civil and commercial agreements, the franchising agreement

remains specifically regulated by the Govern Ordinance no. 52/1997 regarding the legal treatment

of the franchising.

Under the law the franchising is a trading system based on continued collaboration between

individuals or legal entities that are financially independent, by which a person named franchisor

grants another person named beneficiary the right to operate or to develop a business, a product,

a technology, or a service

1.

By encompassin g the particularities set by the lawmaker the franchising may be

comprehensively defined as the economic and legal operation by which a professional trader, the

franchisor, being an individual or a legal entity, who is holding the title over tangible and/or

intangible assets and the title over a successful business, allows another person or several persons,

the franchisees (beneficiaries), to manufacture goods or trade them under their mark, using the

know-how developed by the same, within a franchise network wherein the parties are independent

from a legal perspective, but are operating the franchisable concept in a homogenous and

collective manner.

As we stated in previous works2 the conclusion of the franchising agreement involves going

through three stages. The first of them, wh ich also represents the subject matter of our study, is

the pre-contract stage. The same is followed by the contract or proper stage, and after the expiry

* Lecturer, PhD, Faculty of Law, “Nicolae Titulescu” University of Űucharest (e-mail:

dan.alexandru@sitaru.ro).

1 The Govern Ordinance no. 52/1997 regarding the legal treatment of the franchising, published with the

Official Journal of Romania (“Monitorul Oficial al României”), part I, no. 224 of the 30/08/1997, approved

as modified by the Law no. 79/1998 (O.J. part I no. 147 of the 13/04/1998) and republished, with the texts

being given a new numbering, with the Official Journal, part I, no. 180 of the 14/05/1998.

2 Dan-Alexandru Sitaru, Contractul de franciz în dreptul intern şi comparat (The Franchising

Agreement within the Domestic and Compared Law), Ed. Lumina Lex, 2007, Bucharest.