The Commercial Chamber of the French Court of Cassation delivered a ruling on 4 October (Appeal no. 10 – 20.956) causing a stir among many attorneys, judging from the articles published on the Franchise Magazine website!

See the website at: http://www.franchise-magazine.com/opinions/l-erreur-du-franchise-fatale-au-franchiseur-264.html

The only person to bring any sort of calm to the storm of reactions was Mr. de Balmann, an attorney at law.

The case:

A franchisee had his franchise agreement cancelled (the case was actually referred back to the court of appeal) due to a huge disparity between his output and what had initially been projected.

The Court of Cassation ruled on the basis of an error and reproached the Court of Appeal for not seeking to establish whether “the franchisee’s consent had been given due to a substantial error concerning the business’s profitability”.

Certain attorneys, who openly favour franchisees, considered this to be a reversal of jurisprudence. The reality is a lot less “exciting” as this is not the first time that the judges have had to reiterate that if the franchisor’s instructions go beyond the pre-contractual agreement, said instructions must be fair and straightforward.

It is not so much the case itself that is in question here but rather the interpretation of it, in other words, the extraordinary ability of some attorneys to make a mountain out of a molehill, which personally benefits them and raises their sales figures, as though it were a pure coincidence.

In the end, they seem to have jumped to certain conclusions without examining other aspects of the case:

–         The franchisee in question is not the only member in the network; it would therefore be interesting to know how well the other members of the network performed  (because if others were able to meet the targets it was probably because the franchisee in question was incapable of doing so). Clearly, the case of a franchisee can be dissociated with the success or failure of other members of the network.

–         It is possible that a particular event, such as an increase in raw materials, was responsible for the situation, without it necessarily being a case of initial error.

–         If the franchisee in question did not strictly adhere to the directives related to the franchised concept, this could also be the reason behind the difficulty which he faced. Such distortion, in comparison to the network, could have been the cause of failure.

In other words, it is clear that a case can often be complex and personal. Hence the importance of decoding the messages sent by those who have a direct commercial interest in the way such a case is interpreted.[:]

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