The Romanian Government adopted the Ordinance no.31/1997 on the juridical status of franchise on 28 August 1997. This Ordinance is very important as the legal regulation of a contract on the intellectual property rights is a debut in Romania. The owners of these rights will find in the franchise a juridical modality allowing their efficient exploitation.
1. The owner can penetrate the Romanian market through a local customer without big investments.
2. Taking into consideration the provisions of the new law on the marks, stipulating that any interested person may request the cancellation of a mark, if the owner cannot justify the lack of effective use of the mark in a time period of 5 years, the result is undoubtedly that the franchise represents an efficient way to avoid the mark cancellation.
The Ordinance on the juridical status of the franchise is a well structured normative deed which undoubtedly allows the franchiser as well as to the user to write the contract terms in a mutual advantageous way.
As far as the parts as concerned, the Ordinance stipulates:
a)The franchiser is a merchant the owner of a registered mark with rights that should be exercised on a period at least equal with the contract period. As far as this provision is concerned we consider necessary the following mentioning, as an example. If the franchiser is the owner of the mark X in Romania, mark that is protected till 2004, the contract will not be able to last till 2006, excepting the case when the franchiser takes the responsibility through a special clause, to renew the mark.. In this case the right over the marks will be affected by a suspensive term till the renewal contract is obtained. The franchiser shall have to assure the user a set of products, services or technologies, as well as an initial training for the mark exploitation.
b)The user (franchisee) is a merchant, physical or juridical entity, selected by the franchiser, who adheres to the principle of homogeneity of the franchise net. The know-how represents a set of practical, not patented information, obtained as a result of the franchiser experience and being verified by him. The franchise net includes a set of contractual relationships between a franchiser and several users aiming to promote a technology, a product or a service.
The franchise contract should include the following terms:
- the franchiser's rights;
- the user's rights;
- the goods, services and technologies provided to the user;
- the franchiser and the user attributions;
- the financial terms for the user;
- time period for the contract;
- the contract renewal terms;
- the terms for the operating of the cession or of the rights transfer as in the contract and the preemption terms of the franchiser;
- the terms for using the distinctive marks by the user owned by the franchiser: the company, the badge, the mark, the logo, etc.;
- the right of the franchiser to develop the object of the franchise
- the contract cancellation;
- the franchiser recuperation of any corporal or substantial element belonging to him, if the contract ends before the foreseen dead line period;
- the description of the know-how which shall be done in conformity with the franchise contract, in a separate document or in any other adopted form;
The franchiser controls through the franchise contract, the abiding of all the constitutive elements of the mark image.
The after contractual relationships shall be based on the fair competitiveness rules.
The franchiser may suggest the signing with the user of an exclusivity contract.
The end of the Ordinance mentions that the franchise contracts should abide the deontologic code approved by the Romanian Association for Franchise.
In any case, the parts shall solve their litigation on an amiable way, by communication and direct negotiation, or by arbitrage or High Courts.
ROMINVENT recommends to mention clearly at the concluding of the franchising contract the compromisory clause in conformity with which have the obligation to solve all the litigation occurred during the contracts unfolding as well as in the after contract periods by arbitrage.
The arbitrage compared with the judicial solving, presents the following advantages: confidentiality, cutting of the costs, fast solving of the case.
The content of this article is intended to provide general information on the subject matter. For specific circumstances, please contact us for full advice.
