Spain

• Author: Alberto Echarri - Gonzalo Ulloa
• Pages: 436-456

436 International Franchise Sales Laws

Spain

I. What Is a Franchise?

A. Scope of Law

Article 62 of Spanish Act 7/1996 of January 15, 1996 (Article 62), on the Regula-

tion of Retail Trading is the statute regulating franchising in Spain, and the Royal

Decree 201/2010 of February 26, 2010 (the Royal Decree), provides the rules and

regulations that govern franchise activity in Spain (collectively, the Spanish Fran-

chise Law). The Ministry of Industry and Energy (Ministerio de Industria, Energía

y Turismo) is the Spanish regulatory authority responsible for administering por-

tions of, and enforcing, the Spanish Franchise Law.

Section 1 of Article 62 defines the scope of activity subject to its regulation as

follows:

Commercial activity under franchise systems is that which is carried out

by virtue of an agreement or contract by which a company, known as the

franchisor, grants to another, known as the franchisee, the rights to exploit

its own system of commercialization of products or services.

Article 2 of the Royal Decree defines “trading under the franchise regime” as:

That performed by virtue of the contract whereby a company, the franchisor,

assigns to another, the franchisee, in a specific business sector, in exchange

for a direct, indirect or direct and indirect financial consideration, the right to

exploit a franchise over a business or activity that the franchisor has been

developing previously with sufficient experience and success for the mar-

keting of determined types of products or services and which includes, at

least: (1) the use of a common denomination or establishment sign or any

other IP rights and a uniform layout of the premises or means of transport in

accordance with the object of the contract; (2) communication of the techni-

cal knowledge and know-how by the franchisor to the franchisee; and (3)

the ongoing provision of commercial or technical assistance by the franchisor

to the franchisee throughout the duration of the contract; all of that without

prejudice of the supervision faculties that could be set on the contract.

Section 3 of Article 62 requires a Franchisor to provide a prospective Franchisee

with a presale Disclosure Document containing “all information regarding the fran-

chise network” to enable the prospective Franchisee “to be able to decide freely and

knowingly about incorporation into the franchise network,” and Article 3 of the

Royal Decree provides the specific items of required disclosure.

Spain 437

B. Applicability to Master

The Spanish Franchise Law also applies to Master Franchises granted by a foreign

Franchisor.

C. Exemption

The Spanish Franchise Law does not provide for any exemptions, exclusions, or

exceptions as to its applicability to franchises. The Spanish Franchise Law does

not apply to partnership relationships, trademark licenses, wholesale distribution

arrangements or dealerships, credit card service arrangements, or specific indus-

tries, as long as they do not contain the definitional elements of a “franchise”

described in Section I.A. (See Article 2 of the Royal Decree.)

D. Discretion of Regulatory Authorities

The Spanish Franchise Law does not provide any regulatory authorities with dis-

cretion to determine whether a particular distribution arrangement is or is not a

franchise.

However, special attention should be paid to the Spanish Franchisors Associa-

tion (La Asociación Española de Franquiciadores), which is an important organi-

zation that publishes best practices and nonbinding guidelines, all of which may

be taken into consideration by a court, arbitrator, or other tribunal considering a

franchise matter arising in Spain.

E. Jurisdiction

The Spanish Franchise Law applies only when there is an offer or sale of a fran-

chised business to be located in or to be operated within Spain. The Spanish Fran-

chise Law does not specify whether it applies only to sales and offers to citizens of

Spain. It does not apply to offers or sales originating in Spain for a franchised

business to be operated outside of Spain.

II. Who Must Provide Disclosure?

A. Franchisor

Article 3 of the Royal Decree requires a Franchisor to provide disclosure to a

prospective Franchisee and to a prospective Master Franchisee.

B. Master Franchisee

The Royal Decree requires a Master Franchisee to provide to a prospective Fran-

chisee a Disclosure Document containing the same items of disclosure concern-

ing the Master Franchisee as required to be disclosed for the Franchisor, and also

including the Franchisor’s identification information and financial information.