spotlight on spain
removal. The new trend is to offer an all-round beauty treatment.
“The automotive market is going strong with the likes of Repara Tu Vehículo (car repairs), Cristalbox (windscreen reparation and replacement) and i-Neumaticos, an Internet- based company that sells tyres that are then fitted at a customer’s home or work.
“Regarding e-commerce, there is no doubt that Internet-based businesses are starting to play a larger role. The network is a platform for all kinds of businesses, such as online gaming. “Another rising business is the frozen yogurt market, headed by llaollao, the first frozen yogurt franchise in Spain.”
Currently, there are eight registered UK franchises in Spain, Laura Ashley being the most successful this year with the opening of 15 new shops. “Spain is a good market to set a business up that is already established in the UK,” says José Luis Palma of Gómez-Acebo & Pombo Abogados. “Retail can be a good option at the moment because rents on retail premises are decreasing.”
France, the US and Italy have been the most successful nations in Spain’s franchise market. France has 30 franchise brands, predominantly
24 billion Industry turnover
stat-o-meter: Spanish stats €73,369
Average starting investment
in the supermarket sector; the US has 29 businesses in the restaurant market; and Italy has pushed forward with 27 franchised businesses, mostly in fashion.
Legal matters
It is essential franchisors take detailed legal advice before entering the market to ensure they comply with disclosure and registration requirements. “Franchise regulation in Spain is scattered and unsystematic,” says José. “The main bodies are: EU Regulations; the Retail Act 7/1996; Franchise and Registry of Franchisors Regulation, plus several regional and local acts and regulations. The only requirement to enter Spain is to register with the Regional or National Franchise Register.” Spain is a civil law country with franchise specific legislation and so the following must be adhered to:
1. A franchisor or master franchisee must provide prospective franchisees with a disclosure document at least 20 days before the execution of the agreement or the payment of any amount of money. There is a list of specific items that require disclosure.
2. A franchisor or master franchisee must register with the Franchisor Registry before offering franchises in Spain. The information must be updated by the registrants.
3. Franchise agreements are considered standard terms of business of the franchisor to which the Spanish Unfair Contract Terms Act applies.
4. Spanish agency law may be applicable to franchise agreements. This means that franchisees may be able to claim compensation upon termination of the franchise agreement calculated by reference to the value of its customer base, although the case law on this point is not unequivocal.
233,000
Number of people employed in the industry
63,228
Number of franchised units
874
Number of franchise brands
As franchise agreements can be sizable documents that a non-lawyer may find difficult to follow, it is the role of the franchisor to highlight key rights and obligations in a corresponding disclosure document. A problem that can arise with such ‘contract summaries’ is that not enough detail is provided. The alternative is to repeat the text in full that is already contained in the franchise agreement, although longer sections of technical language can be difficult for the franchisee to understand. Yet on the other hand, the franchisor cannot risk abbreviating legal matters that can then be seen as inaccurate. A wide range of commercial data must be disclosed to the franchisee in Spain, too, including proof of ownership to use the IP rights, size of network, description of franchisor’s experience, estimate of investment a franchisee needs to make, and details of the company’s history.
If a disclosure document is not provided, the law does not state what the consequences are. In accordance with general principles of Spanish law, the franchisee can seek to terminate the agreement for nondisclosure where the franchisees can show that they would not have entered the agreement if a correct and truthful disclosure had been made. <
exhibitions
the british & international Franchise exhibition, 16 & 17 March 2012, olympia, London.
the international Franchise exhibition, business opportunities and Associated trade (siF&Co), Valencia, 20 & 22 october 2011.
22 |
www.franchisornews.co.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52