New Italian Rules Concerning the Foreign Franchisors.

Silvia BORTOLOTTI | ITALY | 2005-12-14


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Said regulation specifies some of the information required by article 4, paragraph 2 of Italian franchise law (law of May 6, 2004, n. 129).

The decree applies only if the franchisor, before the signature of the franchise agreement, operated exclusively abroad and if the franchise agreement, on the ground of the international private law rules, is governed by Italian law.

The core of the new regulation is represented by article 2, according to which the franchisor, at least thirty days before the execution of the franchise agreement, must provide the prospective franchisee with a copy of the franchise agreement to be signed together with the following annexes:

  • a numbered list of all members of the franchise network and the franchisor’s direct points of sale, selected by country;
  • a list, to be supplied upon request of the franchisee, showing the location and the contact details of at least twenty operating franchisees, unless the franchise network comprises less than twenty franchisees, in which case the information must be supplied for the entire network;
  • the indication of the changes, year by year, selected by countries, of the number of franchisees with the relevant locations in the last three years or from the beginning of the activity, in case it started less than three years before;
  • a brief description of any judicial or arbitral proceeding, with respect to which a final judgement or decision has been issued in the past three years.

It should be said that these are not the only disclosure obligations of the non-Italian franchisors. Indeed, the decree expressly refers to article 4, paragraph 1, letters a), b), and c) of the Italian franchise law (129/2004) which provides that the franchisor shall supply the prospective franchisee with the following information:

  • franchisor’s main data including corporate name, capital stock and, upon request, copy of the franchisor’s balance sheets for the previous three years;
  • information regarding the franchisor’s trademarks, including data relating to their licensing and registration;
  • a description of the characteristic elements of the franchisor’s commercial operations and organization.

The decree states that the franchisor must provide the information concerning the franchise agreement and the relevant annexes in Italian, if the franchisee so demands. It also states that the prospective franchisee must use the information received only for the purpose of evaluating the offer to join the franchise system.


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