Publication date: 09.07.2024
Legal regulation of franchising in Ukraine
Introduction.
Franchising is a popular form of doing business that allows entrepreneurs to use a proven business model, trademarks, know-how and other assets of the franchisor. This contributes to the development of small and medium-sized businesses, the creation of new jobs, and the strengthening of the economy. The legal regulation of franchising in Ukraine protects the rights and interests of the parties to franchise relations, determines the procedure for concluding, executing and terminating franchise agreements. In this article, we will review the main principles, regulations and authorities that regulate franchising in Ukraine, as well as the rights and obligations of the franchisor and franchisee.
Basic principles of legal regulation of franchising
The legal regulation of franchising in Ukraine is based on several basic principles that ensure the efficiency and stability of franchise relations:
Theprinciple of contractual freedom. The parties to the franchise agreement have the right to independently determine the terms of cooperation, guided by the current legislation of Ukraine.
Theprinciple of equality of the parties. The franchisor and the franchisee have equal rights and obligations, which contributes to the balance of their interests and fairness in their relations.
Theprinciple of proper fulfillment of obligations. The parties to the franchise agreement are obliged to fulfill their obligations in good faith, in compliance with the terms of the agreement and the law.
Theprinciple of intellectual property protection. Franchise relations provide for the proper protection of rights to trademarks, know-how and other intellectual property used in business.
Key regulations
Legal regulation of franchising in Ukraine is based on a number of regulations, among which the key ones are
TheCivil Code of Ukraine. The Civil Code contains general provisions on the commercial concession (franchise) agreement, defines the rights and obligations of the parties, the procedure for concluding, performing and terminating the agreement.
The CommercialCode of Ukraine. The Commercial Code defines the legal framework for conducting business activities, including franchising, and establishes rules for doing business and protecting the rights of entrepreneurs.
TheLaw of Ukraine "On Protection of Economic Competition". The Law regulates competition issues, including unfair competition and consumer protection, which are relevant to franchise relations.
TheLaw of Ukraine "On Protection of Rights to Trademarks and Service Marks". The Law establishes the legal framework for the protection of trademarks, which are important assets in franchise relations.
International agreements. Ukraine is a party to a number of international agreements governing intellectual property, including the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks and others.
State regulatory authorities
The main governmental authorities responsible for regulating and supervising franchising in Ukraine are:
TheMinistry of Economy of Ukraine. The Ministry is responsible for formulating and implementing state policy in the field of economic activity, including franchising, developing regulations and coordinating the activities of other state bodies in this area.
Antimonopoly Committee of Ukraine (AMCU). The AMCU monitors compliance with the legislation on protection of economic competition, including issues of unfair competition in franchise relations.
Rights and obligations of the franchisor and the franchisee
Franchise relations are based on a commercial concession agreement that defines the rights and obligations of the franchisor and the franchisee. The main rights and obligations of the parties include:
Franchisor's rights
Theright to receive remuneration. The franchisor has the right to receive remuneration for granting the franchise, including the initial fee and periodic payments (royalties).
Theright to control. The franchisor has the right to control the franchisee's activities in order to ensure compliance with quality standards and corporate standards.
The right toprotect intellectual property. The franchisor has the right to protect its rights to trademarks, know-how and other intellectual property used in the business.
Franchisor's obligations
The obligation toprovide support. The franchisor is obliged to provide the franchisee with the necessary support, including training, consulting, marketing support and other services.
The obligation to transferrights. The franchisor is obliged to transfer to the franchisee the rights to use trademarks, know-how and other intellectual property that are part of the franchise.
The obligation toensure quality. The franchisor is obliged to ensure compliance with the quality standards of products and services provided under the franchise.
Franchisee rights
Theright to use the franchise. The franchisee has the right to use the franchise in accordance with the terms of the agreement, including the use of trademarks, know-how and other assets of the franchisor.
Theright to support. The franchisee has the right to receive the necessary support from the franchisor, including training, consulting, marketing support and other services.
The right toprotect interests. The franchisee has the right to protect its interests in case of violation of the terms of the agreement or legal regulations by the franchisor.
Franchisee's obligations
The obligation to complywith standards. The franchisee is obliged to comply with the quality standards of products and services set by the franchisor, as well as corporate standards.
The obligation topay remuneration. The franchisee is obliged to pay the franchisor a fee for granting the franchise, including the initial fee and periodic payments (royalties).
Reporting obligation. The franchisee is obliged to provide the franchisor with reports on its activities, including financial statements, sales reports and other documents.
The procedure for concluding a franchise agreement
The procedure for concluding a franchise agreement in Ukraine includes several main stages:
Preparation of the agreement. The franchisor prepares a draft commercial concession agreement that contains all the necessary terms of cooperation, including the rights and obligations of the parties, the amount of remuneration, the term of the agreement, the dispute resolution procedure and other important provisions.
Negotiations. The franchisor and the franchisee negotiate the terms of the agreement, discuss all important aspects of cooperation and make the necessary changes to the draft agreement.
Signing the agreement. After reaching an agreement on the terms of cooperation, the franchisor and the franchisee sign a commercial concession agreement.
Registration of the agreement. The commercial concession agreement is subject to mandatory state registration with the state authorities. For this purpose, it is necessary to submit a relevant application and a package of documents to Ukrpatent or another authorized body.
Execution of the agreement. After registration of the agreement, the parties proceed to its execution in accordance with the terms and conditions stipulated by the agreement.
Protection of rights in franchise relations
The protection of rights in franchise relations is carried out through various legal mechanisms that ensure the proper implementation of franchise legislation. The main ways to protect rights include
Administrative protection. It is carried out by applying to public authorities, in particular to the Antimonopoly Committee of Ukraine or the Ministry of Economy of Ukraine.
Civil remedies. This includes filing lawsuits for recognition of rights, compensation for damages, recovery of compensation for violation of rights in franchise relations, termination of infringing actions, and other claims.
Criminal defense. Certain types of violations of rights in franchise relations, including fraud or misuse of intellectual property, are subject to criminal liability.
Administrative sanctions. Administrative fines and other sanctions may be imposed for violations of rights in franchise relations in accordance with Ukrainian law.
International aspects of franchising
Franchising is international in nature, and many Ukrainian companies use the franchise model to enter international markets. The main international aspects of franchising include:
International agreements. Ukraine is a party to a number of international agreements governing intellectual property and franchising, including the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks, and others.
International cooperation. Ukrainian companies can enter into franchise agreements with foreign partners, use international standards and best practices in the field of franchising.
International dispute resolution. International franchise disputes can be resolved through international arbitration or the judicial authorities of the countries that are parties to the dispute.
Conclusion.
The legal regulation of franchising in Ukraine is an important tool for protecting the rights and interests of participants in franchise relations, stimulating the development of small and medium-sized businesses and creating favorable conditions for innovation. It includes the regulatory framework, the activities of state regulatory and supervisory authorities, the rights and obligations of the franchisor and franchisees, as well as mechanisms for protecting rights in franchise relations. Effective legal regulation contributes to the development of the economy, raising the level of respect for intellectual property and ensuring a stable legal environment in Ukraine.
So, it doesn't matter whether you need a lawyer's advice or a lawyer's advice. Legal marketplace "CONSULTANT" will help to solve any problem! All the necessary services at any time: analysis of documents, legal analysis of the situation, legal analysis of the situation, written consultation, verification of documents by a lawyer, legal analysis of documents, legal opinion of a lawyer, legal opinion of a lawyer, legal analysis. Are you looking for an online lawyer or a lawyer online? Choose CONSULTANT - a lawyer is always at your side!
Our legal opinion and legal opinion of a lawyer, legal analysis with a lawyer online and legal advice will help you at any time! Order a document review by a lawyer and general legal analysis right now! And with the services of a lawyer's consultation and document analysis with a written consultation - you will get the whole range of necessary services!
