Are there laws in Lebanon to protect F&B brands wishing to franchise?
There is no special law that governs franchising in Lebanon. Franchising is subject to the relevant provisions of the applicable laws, including civil and commercial laws. However, a code of ethics determining the terms that apply to a franchising relationship does exist at the Lebanese Franchise Association. It is similar to the basic rules determined within the Codes of Ethics of the European Franchise Federation and the World Franchise Council. Its members must adhere to it. It would be advisable for a Lebanese franchisor to request from its franchisees to conform to the provisions of the above-mentioned LFA code of ethics. The term “franchise” remains legally undefined in Lebanon. Only one court decision has recently differentiated franchising from commercial representation and exclusive
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distributorship but this may not give a solid legal base to rely upon in case of disputes and claims, as it
does not create a mandatory precedence that courts have to follow.
What is the legal framework for franchising in Lebanon?
Franchising in Lebanon depends mainly on the franchise agreement signed between the franchisor and the franchisee. In the absence of a special law, the main protection of the franchisor resides in the protection of its distinctive intellectual property rights, such as the trademark and the logo, and on the provisions of its franchise agreement. The protection of the intellectual property rights is of prime importance prior to granting any franchise as it protects such rights and prevents their use by third parties. With respect to the protection of intellectual property rights in Lebanon, the franchisor is advised to duly proceed with the registration formalities at the Ministry of Commerce and Trade and to make sure to be the first user of those intellectual property rights. Such registration assures a protection of the trademark for 15 years.
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What advice would you give to a Lebanese F&B brand that plans to franchise?
To engage professional advisers to assist in preparing all operation manuals and to put a system in place to which a franchisee will have to conform to. Also to set up a proper and flexible legal structure to carry on its franchising activities in and outside Lebanon, and, most importantly, to register its intellectual property rights in Lebanon and the targeted countries and put together a solid franchise agreement.
What improvements can be brought legally to ensure franchise protection?
A new law should be passed to clarify and define franchising and Lebanon should become a member of the World Franchise Council. This would give the appropriate legal frame and protection. Furthermore, and on a micro level, instructions should be given to the officers at the ministry of economy and trade to abstain from registering a franchise agreement as a commercial representation or exclusive distributorship agreement. It may also be advisable to create a special register for franchising with simplified registration formalities.
nahaslaw.com.lb
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