Updated on 02/15/2024
I. Economic data
A. Macro-economic data
• General data [1]
Population 2021: 67,749,632 inhabitants[2]
Area: 551,695 km2
Density 2022: 122.92 inhabitants/km2
GDP (nominal) 2022: €2,639.1 bn
GDP/capita 2022: €34,100
GDP (PPP) 2022: $3,764 bn[3]
GDP (PPP)/capita 2022: $55,387.5[4]
2022 growth rate: 2.5%
GNI/capita (PPP) 2022: $56,370
HDI 2021: 0.903
Literacy rate: 100%
Life expectancy 2022: 82.5 years[5]
Policy
In France, the political system is based on a democracy with direct universal suffrage. Citizens elect their president every five years. At the time of writing, the current President of the Republic is Emmanuel Macron, who was elected in 2017, and Gabriel Attal has been the Prime Minister since January 9, 2024. The President of the Republic and the Prime Minister are both members of the Renaissance (Rebirth) political party.
French government is structured around representative democracy and the separation of powers.
France is the European Union's leading agricultural power, exporting almost 20% of its total production. Its resources are mainly agricultural (oilseeds, cereals, sugar beet, beef, poultry) and industrial (automobiles, aircraft, etc.). France's services sector also dominates economic activity (transport, tourism, healthcare)[10].
Agriculture accounts for 1.6% of French GDP, mining and manufacturing 16.7% and services for 81.7%[11].
Resources
Economic development
As a member of the G7, France ranks seventh in the world in terms of nominal GDP per capita.
The French economy has gone through various phases resulting in some dynamic changes. In the post-war period, France experienced a period of economic reconstruction, followed by rapid growth in the 1960s, marked by an industrial boom[6]. However, the oil crises of the 1970s took their toll on France's economy, leading to a transition to a more diversified economy.
More recently, the global financial crisis of 2008, the COVID-19 pandemic and the war in Ukraine have also affected France, shaping the economic landscape.
The COVID-19 pandemic and the war in Ukraine have caused consumer prices to rise since the end of 2021, reaching 6.2% in October 2022. Inflation registered an average rate of 5.2% in 2022, marking a clear increase on previous years; such a level of inflation had not been seen since the 1980s[7].
These events have put the French economy under pressure, but since 2023, inflation has fallen, down to 3.70% in December 2023[8]. France's inflation rate is therefore below the world average of 6.9% in 2023[9].
Foreign investment
France encourages foreign investment. Among OECD members, France is one of the most open to foreign investment. According to the AT Kearney 2023 Foreign Direct Investment Confidence Index[14], France ranks sixth among the most attractive economies for foreign investment.
Foreign direct investment inflows in 2022 totaled 34.6 billion euros[15]. The European Union isthe leading foreign investor, investing nearly €65 billion in France for agriculture, €16.8 billion for cohesion policy and €1 billion for the framework of the just transition mechanism for the period 2021-2027[16].
Population
Although the average population density is around 122.92 inhabitants/km2, the urbanization rate is around 80%. The population is mainly concentrated in urban units (eight out of ten people live in an urban unit). Population density is highest in the Île de France region, on the Mediterranean coast and in the French overseas departments[12].
France has several major cities with populations of over 200,000.
France's ten most populous cities are Paris (2,133,111), Marseille (873,076), Lyon (522,250), Toulouse (504,078), Nice (348 085), Nantes (323,204), Montpellier (302,454), Strasbourg (291,313), Bordeaux (261,804) and Lille (236,710).[13]
[1] Sauf indication contraire, les données ci-dessous proviennent d' INSEE
[2] Atlas socio-économique des pays du monde, Larousse, édition 2024
[3] Source : La Banque Mondiale
[4] Source : La Banque Mondiale
[5] Atlas socio-économique des pays du monde, Larousse, édition 2024
[6] Période des trente glorieuses – entre 1950 et 1959, la croissance moyenne du PIB en France est de 4,8% et elle est de 5,7% entre 1960 et 1974 (Wikipédia – Produit intérieur brut de la France)
[7]Source : INSEE
[8] https://france-inflation.com/
[9]Etude sur les perspectives de l’économie mondiale – Fonds monétaire international - IMF.org
[10]France: activités économique - LAROUSSE
[11] Atlas socio-économique des pays du monde, Larousse, édition 2024
[12] Source : INSEE
[13] Source : INSEE
[14] Source : Kearney
[15] Source : INSEE
[16] Source : Commission Européenne
B. Economic data specific to franchising
Historical background
Franchising began to develop in France in the late 1920s, with the establishment of a wool retail network. However, it was not until the 1970s that the franchise system really took hold in France[17].
Franchising has become a common business format in France, and has developed in virtually every sector of activity (retail, personal services, food, personal equipment). Thanks to its strong growth, franchising has gone from being a niche marketing technique to an cutting-edge and competitive vehicle that has had a major impact on France's economic weight[18].
Trade shows
In 1982, the FFF created the International Franchise Exhibition. It is held every year in Paris under the name "Franchise Expo Paris". It is Europe's leading trade show. The next edition will take place from March 16 to 18, 2024. Every year, more than 30,000 potential franchisees come to the show to meet exhibitors, including major French and international brands, making it one of the world's leading franchising events[23].
Institution [19]
The franchise sector is arranged into a federation, and the French Franchising Federation (Fédération française de la franchise”) (FFF)[20], was created in 1971. Since 2004, the FFF, in partnership with the Banque Populaire group, has conducted an annual survey on the state of franchising in France ("Enquête de la franchise").
Since 1987, the FFF has held Franchise Ribbons ("Rubans de la franchise") () to honor franchisees, franchisors and franchise partners for their work in promoting franchising in France and abroad[21].
In 1988, the FFF also set up a franchising school, which became the Académie de la franchise. The institution provides training for both franchisees and franchisors, as well as helping franchise professionals to master the trade and make a success of their projects[22].
Contract content
In practice, most franchise agreements are concluded for a period of five or ten years[31].
For 33% of franchisees, initial franchise costs are less than 50,000 euros. For 32%, these costs are between 50,000 and 200,000 euros. Finally, for 35% of franchisees, costs exceed 200,000 euros.[32]
Statistics
South Africa has around 800 franchise systems, spanning 14 sectors [23]. In 2018, there were 45,011 outlets in South Africa. 84% of franchisees rate their relationship with the franchisor as very good or good [24].
South Africa is now home to 68,000 franchisees [25]. 40% of them are based in the Gauteng province [26].
The biggest sector in the franchise business is fast food. South Africa has around 85,000 restaurants and over 850 franchises. The international food market is estimated to be worth $4.9 billion by 2026 [27].
In 2022, South Africa had 1,907 businesses and companies in a state of bankruptcy [28].
International
The franchise show has an international reach, and according to key figures for the 2023 event, more than 20% of exhibitors were non-French[35].
L'Académie de la franchise, which offers a wide range of training courses for franchise professionals, offers franchisors support in taking their concept abroad.
France currently boasts some 300 foreign concepts, including well-known brands such as McDonald's, Domino's Pizza, Subway and Century 21[36].
Economic impact [33]
According to the FFF and Banque Populaire franchising survey, in 2023 franchising generated sales of 88.49 billion euros, which is an increase of 15.5% compared to 2022.
The sector created 951,620 direct and indirect jobs in 2023, which is an increase of 13% compared to 2022. 57% of franchisees created at least one job in 2022[34].
Statistics [14]
According to an FFF survey conducted in 2023, the franchising sector in France is made up of 2,035 franchise networks, representing an increase of 3.2% compared to 2022, and 92,132 franchised outlets (+9% compared to 2022)[24]. This makes France the world’s fifth biggest country in terms of franchise networks[25].
The sectors with the most brands are personal goods (338 brands), personal services (277 brands), fast food (262 brands), food (211 brands), and miscellaneous (flowers, toys, leisure and sports, stationery, telephony, medical and paramedical items) (174 brands)[26] .
Franchisors are mainly active in the following sectors: personal services (10.4%), business services (6.1%) and household goods (5.7%).
The sectors with the highest sales are food (32.45 bn euros), household goods (10.34 bn euros), fast food (8.91 bn euros), miscellaneous (8.68 bn euros), and personal goods (6.26 bn euros)[27] .
The food sector has the most outlets (18,029), followed by the automotive services sector (10,243) and the personal goods sector (10,232)[28].
According to the 19th franchise survey carried out by the FFF and Banque Populaire, 90% of franchisees are satisfied with the quality of their franchisor's support and facilitation, and half (49%) are very satisfied. 93% of franchisors opened an outlet in 2021[29]. For franchisees who have been in business for more than five years, 69% plan to invest in equipment purchases over the next two years, 69% will invest in renovating and extending premises, and 32% will invest in new technology and innovation[30].
[17] Source : Fédération Française Franchise
[18] Source : Fédération Française Franchise
[19] Unless otherwise stated, the information below comes from the Fédération Française Franchise
[20] 29 Boulevard Courcelles, Paris 75 008, tél : 01 53 75 22 25
[21] Source : FFF
[22] Source : FFF
[23] Source : FFF
[24] Fédération française de la franchise, données 2023 et étude d’impact Diagnostic & Systems 2024
[25] Source : Axe Reseaux
[26] Source : Toute la Franchise
[27] Fédération française de la franchise, données 2023 et étude d’impact Diagnostic & Systems 2024[28] Idem
[29]Source : Banque Populaire
[30] Idem
[31]Source : Service Publique
[32]Source : Banque Populaire
[33] Sauf indication contraire, les informations ci-dessous proviennent de la Fédération française de la franchise, données 2023 et étude d’impact Diagnostic & Systems 2024
[34]Source : Banque Populaire
[35]Source : Toute la Franchise
36] Source : Axe Reseaux
II. Legal information
A. Legal information directly related to the franchising
Applicable legislation
In 1972, the European Franchise Federation drew up the European Franchise Code of Ethics. This text is binding on members of the European Franchise Federation, and has been adopted by the FFF, which is a member of the European Franchise Federation. Franchisors who are members of the FFF are obliged to comply with the code's requirements.
The European Franchise Code defines franchising in Section 1 as a system of marketing products and/or services and/or technologies, based on close and continuous collaboration between legally and financially distinct and independent enterprises, the franchisor and its franchisees, in which the franchisor grants its franchisees the right, and imposes the obligation, to operate a business in accordance with the franchisor's concept. The right thus granted authorizes and binds the franchisee, in return for a direct or indirect financial contribution, to use the brand name and/or trademark for products and/or services, know-how and other intellectual property rights, supported by ongoing provision of commercial and/or technical assistance, within the framework and for the duration of a written franchise agreement entered into between the parties for this purpose.
At national level, the so-called "Doubin" law of December 31, 1989[37] and its enabling decree of April 4, 1991[38] , now codified in Sections L330-3 and R330-1 of the French Commercial Code, require franchisors to disclose pre-contractual information to potential franchisees.
In Book III of the Commercial Code, Sections L341-1 and L341-2, resulting from the Macron Law of August 6, 2015, apply to franchise contracts. The first of these texts sets out the scope of application of these provisions and provides for indivisibility of contracts, while the second text oversees the use of post-contractual clauses that restrict entrepreneurial freedom.
More special regulations also apply to franchising, such as those relating to competition law, e.g., Sections L442-1 and A441-1 of the French Commercial Code. Any person selling products or providing services, bound by a franchising agreement to a franchisor, must inform the consumer of his or her status as an independent business in a legible and visible manner, on all information documents, including advertising, as well as inside and outside the place of sale (Section A441-1 of the French Commercial Code).
Pre-contractual information
Firstly, under Section L330-3 of the French Commercial Code, the franchisor is required to provide the franchisee with a pre-contractual disclosure document at least twenty days before the franchise agreement is signed and the franchise fee paid by the franchisee. The pre-contractual information document must include details of the company's trading history and experience, the state and growth prospects of the market concerned, the size of the network of operators, the contract duration, conditions of renewal, termination and assignment of the contract, and the scope of exclusive rights.
Secondly, Section R330-1 of the French Commercial Code precisely lists the information that must be included in the pre-contractual information document:
- information on the franchised company (legal form, identity of managers, amount of capital, address of head office and nature of the business),
- concept and trademark information (trademark registration date, registration number, etc.),
- information on the franchisee's bank accounts,
- information on the operator network (including the number of franchisees),
- information on the general and local market conditions for the products/services covered by the contract,
- information on the franchise contract (proposed duration, renewal conditions, etc.).
Thirdly, in addition to the above-mentioned provisions of the French Commercial Code, Section 1112-1 of the French Civil Code, which as a matter of public policy is a law that cannot be waived, specifies on this point that "a party who is aware of information whose importance is decisive for the consent of the other party must inform the other party if the latter is, legitimately, unaware of the information or relies on her/his co-contractor" (paragraph 1) and that "information of decisive importance is that which has a direct and necessary link with the content of the contract or the nature of the parties" (paragraph 3).
Section 3(3) of the European Code of Ethics for Franchising, whose provisions are not a matter of public policy, and so can be waived, specifies that the franchisor must provide a written pre-contractual information document before signing the franchise agreement. This document must contain information on the content of the contract and the resulting expenses.
Contract perfomance
The franchise contract is a standard form agreement[39] . It is also a bilateral contract[40] which places respective obligations on franchisor and franchisee. The franchisor is required to transmit its know-how and distinctive features, and to provide assistance to the franchisee. These three duties form the basis of the franchise contract. Furthermore, as franchisees are all part of the same network, their franchisor is bound to treat them equally. Only objectively different situations can justify different treatment.
Section 2 of the European Franchising Code of Ethics specifies that franchisees must collaborate loyally in the success of the network they have joined, be responsible for the financial and human resources they commit to the franchise network, and act loyally towards all franchisees in the network.
The European Franchise Code of Ethics adds that the parties shall preserve the image and reputation of the
network in the operation of their respective businesses, act fairly in their mutual relations and notify the other party of any breach of contract, respect the confidentiality of information relating to the franchise network, and resolve disputes in good faith and loyalty through direct communication and negotiation. If direct negotiation fails, the parties must seek to resolve the dispute in good faith through mediation and/or arbitration where appropriate (Section 2, paragraph 4).
A franchise agreement may be terminated at the end of its term, or may be terminated in accordance with general contract law. The franchise contract may be terminated by court order, by a termination clause, or unilaterally in the event of a sufficiently serious breach of one or more obligations by one of the parties.
Trademarks
French trademarks are registered with the Institut National de la Propriété Industrielle (INPI)[44] .
The French Intellectual Property Code governs trademark law in France. French trademark registration is valid for ten years and can be renewed indefinitely[45].
France is also a member of the Paris Convention for the Protection of Industrial Property. As a member of the World Trade Organization, it is bound by the TRIPS Agreement. Finally, as France is a member of the Madrid system, a French trademark can be registered through the international trademark system.
The Madrid system[46] enables companies to obtain trademark protection in up to 130 countries by filing a single international application, in a single language, with the World Intellectual Property Organization (WIPO). Under Article 6 of the Madrid Agreement, trademark registration is valid for 20 years.
To go further
In France, trademark applications can be handled both nationally and through the European or international systems. Examinations verify formal admissibility conditions but do not check the availability of the trademark. France allows multi-class trademark registrations. If a trademark is not used for 5 years or more, any interested third party can request its revocation for non-use. To develop a franchise in this country, it is advisable to cover "Business assistance relating to franchising" and "retail services", both of which are accepted under class 35 by the trademark office. Retail services require specification of the intended goods or services. Recording a franchising agreement is not compulsory though advisable for legal advantages.
Jurisdiction and applicable law
France, a member State of the European Union, is governed by the Brussels I-bis regulation[41] on the question of jurisdiction. This regulation contains rules for defining the competent court (Sections 1 to 6). It also provides for situations where the parties to a dispute have used a jurisdiction clause (Section 25) in their contract to define the competent court in advance.
On the question of applicable law, the Rome I Regulation[42] applies whenever a dispute is brought before a court in a member State of the European Union. In accordance with the Rome I regulation, the parties are free to choose the law applicable to their contract, and where no choice has been made, rules are laid down for determining the law applicable to the contract.
However, it is important to check that there is no bilateral agreement between the franchisor and franchisee's states governing questions of jurisdiction and applicable law, should they be of different nationalities.
In addition, the parties (franchisor and franchisee) may decide to have recourse to international arbitration in the event of a dispute. In this respect, France has ratified the New York Convention[43] facilitating the recognition and enforcement of foreign arbitral awards.
[37] Law n°89-1008
[38] Decree n°91-337
[39] Article 1110 du Code civil
[40] Article 1106 du Code civil
[41] Regulation No. 115/2012 of the European Parliament and of the Council of December 12, 2012, concerning jurisdiction, recognition, and enforcement of judgments in civil and commercial matters.
[42] Regulation No. 593/2008 of the European Parliament and of the Council of June 17, 2008, on the law applicable to contractual obligations
[43] Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958
[44] 15 Rue des Minimes – CS50001 – 92677 Courbevoie Cedex, Tel: +33 (0) 1 56 65 89 98
[45] Article L712-1 of the Intellectual Property Code
[46] Madrid Agreement concerning the International Registration of Marks
Competition law
National competition law is governed by Book IV of the French Commercial Code, entitled "De la liberté des prix et de la concurrence" (On freedom of pricing and competition). Sections 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) govern European competition law and prohibit anti-competitive agreements and abuses of dominant positions.
The authority responsible for monitoring compliance with these provisions is the Competition Authority ("Autorité de la Concurrence")[47], which thus has a broad remit, including consumer protection, monitoring compliance with competition law and ensuring free competition.
The Competition Authority may be consulted by the courts on anti-competitive practices defined at national and international level. It can be called upon by the Minister for the Economy, by companies and by the French overseas departments to investigate any practice liable to hinder competition. The Competition Authority can impose sanctions and injunctions.
At the European level, the European Commission is responsible for ensuring compliance with competition law within the European Union.
French and European competition law only prohibits anti-competitive practices when they have the purpose or effect of appreciably affecting competition.
Anti-competitive practices prohibited in principle by competition law include the following:
- limiting access to the market or the free exercise of competition by other companies;
- preventing the free market from setting prices by artificially encouraging them to rise or fall;
- limiting or controlling production, market outlets, investment or technical progress.
Exemption regulation no. 2022/720 of May 10, 2022, on the application of Section 101 of the TFEU to vertical agreements, may allow the exemption of vertical agreements containing vertical restraints, provided that the said agreement does not contain the fixing of a selling price or the imposition of a minimum selling price (it is, however, possible to impose a maximum selling price or to recommend a selling price). Nor must the agreement contain any restrictions on the territory in which the franchisee may sell the contracted goods or services (with certain exceptions), or any non-competition clause of indefinite duration or exceeding five years, etc.
Personal data
In France, the protection of personal data and privacy is governed by the General Data Protection Regulation (GDPR)[48], which is European Union legislation that applies uniformly to all member States. The GDPR was adopted in 2016 and came into force on May 25, 2018.
The GDPR establishes a comprehensive legal framework for the collection, processing and storage of personal data, guaranteeing respect for fundamental rights to privacy and data protection. The GDPR protects only the personal data of natural persons, but it must be complied with by any organization or person carrying out processing of personal data, whether automated or not, contained or intended to be contained in a file (Section 2 of the GDPR).
The GDPR applies when the controller (the person initiating the processing) and/or the processor are established in the territory of the Union, as well as when the personal data processed are those of people in the territory of the European Union (Article 3 of the GDPR).
France also has national legislation, the "Loi informatique et liberté"[49], in force since 1978, which applies to the processing, whether automated or not, of personal data contained or intended to be contained in files (Article 2). This law incorporates the principles of the GDPR.
The CNIL, National Commission for Information Technology and Civil Liberties, (Commission Nationale de l'Informatique et des Libertés)[50] is the national authority in charge of personal data protection, and has the power to impose sanctions.
Special provisions for foreign investments
Under Section 63 of the Treaty on the Functioning of the European Union, as a member of the European Union, France cannot in principle impose restrictions on the movement of capital from EU member States or non-EU countries.
France has also been subject to European rules on foreign direct investment since the Foreign Investment Screening Regulation[51] came into force. The purpose of this regulation is to establish a European framework for cooperation in the assessment of foreign investments likely to threaten security and public order in European Union member States. France must therefore notify and cooperate with the European Commission and other member States on foreign investments in critical sectors.
Investment in France is unrestricted, with the exception of sectors related to national defense or activities essential to safeguarding the country's interests[52].
Main websites
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Intellectual property: https://www.inpi.fr/;
-
French Franchise Federation: https://www.franchise-fff.com/;
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Legislation: https://www.legifrance.gouv.fr/;
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Competition: https://www.autoritedelaconcurrence.fr/fr;
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Personal data: https://www.cnil.fr/fr/particulier;
-
World Bank: https://www.banquemondiale.org/fr/home.
B. Peripheral legal data
[47] 11 Rue de l’Échelle, 75001 Paris, Tel: +33 (0) 1 55 04 00 00
[48] Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016
[49] Law No. 78-17
[50] 3 Place de Fontenoy, TSA 80715, 75334, Paris Cedex 07, Tel: +33 (0)1 53 73 22 22
[51] Regulation No. 2019/452
[52] Article L.151-3 of the Monetary and Financial Code