Polish bill to regulate franchising now being drafted

Poland
Available languages: PL

In Poland, the necessity of regulating franchising has been widely discussed in recent years, resulting in the announcement that a bill on this issue is now being drafted, along with reports and discussions aimed at self-regulation within a specialised team at the Office of the Ombudsman for Small and Medium-sized Enterprises. Regarding the legislative work on the issue that is now gaining momentum, the Polish Ministry of Justice announced the preliminary assumptions of the draft on franchising.

The most important changes in the draft law include the introduction of the following:

  • the definition of a franchise;

  • the requirement to provide a potential franchisee with information on the franchise conditions. According to the Ministry, a franchisor would be obliged to provide the potential franchisee with a document containing the most important terms of the franchise agreement 14 days before its signing. This is supposed to ensure better legal protection for the franchisee.

  • a new arbitration court, which would examine cases against the background of a franchise agreement. The draft is to determine, for instance, the rules of procedure before this court. The aim is to speed up the proceedings and thus make it easier for the parties to continue their cooperation under the franchise.

  • precise rules concerning non-compete clauses. This is intended to protect the interests of the franchisor and the franchisee (who will not be unduly restricted in their right to take up another job or business).

  • ·notice periods for termination of a franchise agreement.

  • contractual penalties.

  • an app for franchise agreements. The legislator proposes to create an application which, based on an algorithm, would allow verification of whether a franchise agreement meets relevant market standards.

  • a “good brand” mark to be used by franchisors who conduct their business in compliance with the highest market standards.

The Draft has not been published, but we will closely monitor the legislative process.

For more information on this draft law and how it could affect your Poland-based business, contact your CMS client partner or local CMS experts.