Cheat sheet for those who experienced the first time. Franchising - a popular but very complex deal, as concerns the foundations of business on both sides. Accordingly, this contract is very much the legal niceties. Lawyers on both sides should not only themselves to imagine all these nuances, but also explain the consequences of certain conditions employees of commercial entities that are negotiating. In the terminology of Russia's civil law known as franchising franchise. Legal regulation of the treaty subject of Chapter 54 of the Civil Code. What's unusual in the design of a franchising agreement On the side of the right holder can make only a commercial organization. This is due to the fact that under the contract of commercial concession shall be made right to use the brand name, which can only belong to a legal person. Consequently, the individual entrepreneur to be the holder of the contract of commercial concession can not, because he was acting in public circulation only under his own name (Article 19, Civil Code). As a user can perform a commercial company or an individual entrepreneur. The contract is only by signing a single document. This contract can not be contracted through the exchange of documents through the exchange of letters, faxes, telegrams. That is the general rule of paragraph 2 of Article 434 of the Civil Code does not apply to him. Failure to comply with the written form shall entail the invalidity of the contract in connection with the small (Clause 1, Article. 1028 Civil Code). I terminated the contract of commercial concession, if the exclusive right was transferred from the holder to a third party? No, this transition is not a ground for termination of the contract or making any changes and additions. By the Civil Code a new holder becomes a party to the treaty as part of the rights and duties relating to that has become the exclusive right. The contract is subject to compulsory state registration (Art. 1028 Civil Code). And for the parties to a commercial concession agreement shall enter into force upon its signature (or any other date agreed by the parties). But in relations with third parties by the contract of commercial concession shall have the right to invoke the treaty only after its registration (Article 1028 Civil Code). This also applies to cases where the recorded changes to the contract (art. 1036 Civil Code). Action in 2007 the registration of a commercial concession approved by order of the Ministry of Finance of Russia of 12.08.05 № 105n. As a general rule, a contract franchise record in a body that has registered holder as a legal entity - that is, the tax office. However, if the right holder "registered" in a foreign country, then the registration agreement should apply to the inspection, the registered user. If passed in the treaty rights include the exclusive rights protected by patent law (patents, trademarks, etc.), the contract must be registered also in the appropriate Patent Office (Section 2, Article. 1028 Civil Code). Failure to comply with this requirement also implies recognition of the treaty null and void (invalid). Registration procedure approved by order Rospatent from 29.04.03 № 64. Must register any change in the contract. And if the changes relate to the exclusive rights protected by law, they are recorded twice: in the Tax Inspectorate and the relevant patent office. Specific material terms of franchising Rights, which necessarily transmitted to the user. First of all, you must specify the rights that are transferred to the user. Pay attention: among these rights must be: - the right brand name and (or), and (or) the commercial designation - the right to protected commercial information (which require the user to implement the rights referred to it). Specifying the transfer of these rights - an essential condition of a commercial concession, if it will not, the court may deem it not concluded. "Referring to the contract of commercial concession in relations with third persons, the parties can only after state registration of franchising" The right to use the trade name (commercial designation) is carried out by a simple permission. This authorization is included in the text of the treaty. Now on protected commercial information. You must specify in the contract of which the right holder must perform in order to provide user access to commercial secrets. That is, information in respect of which the rights holder has certain protective measures. These include, inter alia, include the business experience and know-how. I think that is not enough to make the contract wording "the user gets access to commercial information holder, part of its trade secrets." Protection of trade secrets is to enact a package of local intra-acts. Therefore necessary to highlight what confidential information presented to the user, where it is reflected information. This can be done both in the treaty itself or in a separate agreement, which is attached to the contract. The contract also specifies the scope of activities in respect of which establishes a commercial concession: sale of certain goods, services, etc. Can holder to change its corporate name during the period of the franchise agreement? Deny this holder can not. But in this case the right holder the right to demand a rescission of the contract with compensation of losses or a reduction in remuneration, which is due to the rightholder. But if you owned the rights holder the right to brand name (commercial designation) stops at all, then terminated and the contract of commercial concession (paragraph 3 of Art. 1037 Civil Code). Duration of the contract. The contract of commercial concession indicated he concluded for a period or without specifying the period - this is essential condition for this type of contract. If the term would not be named, either party may cancel the contract, warning the other side for the six months since the contract does not set a longer period (Section 1, Art. 1037 Civil Code). Given that the commercial concession regulates rather complex relationship between the parties (which may be more than two), we can recommend to install all the same period of the contract.