The principal is also owner of the customer

Master Serge Meresse, lawyer, founder and partner in the firm Thréard.

What is a warrant

Serge Méresse: "the mandate is a contract governed by articles 1984 and following of the civil code." Concretely, a principal gives the power to do something for himself and for his account to an agent. Agent benefits often give right to compensation and reimbursement of its costs.

What are the differences between a franchise agreement and a contract of mandate

Olga Zakharova-Renaud: "in General, there is no warrant in the franchise." The mandate is a civil contract while the franchise is commercial. The franchisee is an independent trader. The agent, he decides nothing. It executes its mission in the conditions laid down by the principal. This form of contract primarily found in missions of insurance, in case, financing brokerage. Note that franchise, notably in the ready-to-wear networks, sometimes use techniques of the mandate (make on behalf of and for the account) while signing a business contract: it is the affiliate commission. Jurisprudence considers that all provisions of the civil code relating to the civil mandate are applicable to the contract of commission membership.

What happens in the case of operating losses

Serge Méresse: "according to the 1999 civil code article, the principal shall reimburse the agent fees and expenses that causes it the execution of its mandate and to pay promised compensation even if the case did not succeed." And according to the 2000 article, the principal must compensate its partner of the losses incurred in the management of the mandate. What is makes sense!

This status is then extremely protective and avantageux

Serge Méresse: "...". But normal. When an agent is something as its principal, it is normal it is compensation for the losses that this may cause. The mandate can be re-qualified in contract of employment under certain conditions. The texts governing the mandate is not of public order, the principal may avoid them. But losses, there will be conflict. If they are due to the implementation of the mandate without fault of the agent, then the principal shall cover them. We have managed a litigation on this issue for the attendant against oil companies since 30 years. The jurisprudence, that it was created on this issue also applies to the franchise.

But why would the principals responsible for the decline of activity

Serge Méresse: "you look at the case by case basis the causes of operating losses." The mandate given to the principal economic key: it is him that depend on selling prices, the commission paid to the agent, operating conditions, therefore charges, products sold so the sales, marketing techniques. The principal is also owner of the customer. It controls 100 agent who, in turn, is required to account for its management. Agents do not realize, at the signing of the contract, these legal implications. They are attentive to the profitability in the business plan, forgetting that it is the legal which sets the rules of the game which, sometimes, is pipé. You must start by carefully read the contract.