Distribution and franchise law in France in 2026: exclusive, selective and vertical restraints

Distribution and franchise law in France in 2026: a complete legal overview

The marketing of products and services in France relies on a variety of contractual structures whose choice determines the degree of commercial integration, the economic risk borne by each party and the application of specific tax, social and competition rules. This article presents the legal framework applicable to the main distribution contracts in 2026: exclusive concession, selective distribution, franchise, affiliated commission, as well as the constraints imposed by EU competition law through Regulation (EU) 2022/720 on vertical restraints.

1. Typology of distribution contracts

1.1 Exclusive concession

The concession contract is an agreement by which a supplier (concedant) entrusts an independent merchant (concessionaire) with the resale of its products on a defined territory, generally accompanied by reciprocal exclusivity. This exclusivity has two dimensions: supply exclusivity (the concessionaire may only source from the concedant for the covered products) and territorial exclusivity (the concedant undertakes not to appoint other concessionaires on the allocated territory).

Concession is not specifically regulated by the French Commercial Code and is governed by general contract law. It is nevertheless framed by EU competition law, in particular Article 101 TFEU and the 2022 Vertical Block Exemption Regulation (VBER). French case law recognises the concessionaire's right to compensation in case of abrupt termination of the commercial relationship (Article L. 442-1, II of the Commercial Code), and possibly a clientele indemnity when the conditions of commercial delegation are met.

1.2 Selective distribution

Selective distribution allows the supplier to choose its distributors on the basis of objective qualitative criteria applied uniformly and non-discriminatorily. Particularly used for luxury products, prestige cosmetics, watchmaking, fine jewellery and consumer electronics, it aims to preserve brand image, ensure quality after-sales service and maintain a sales environment consistent with the positioning of the products.

The Métro case law (ECJ 1977) set the validity conditions: the nature of the product must justify selective distribution to preserve its quality and proper use, distributors must be chosen on objective qualitative criteria uniformly applied, and the criteria must not exceed what is necessary. The Coty judgment (CJEU 2017) confirmed the validity of prohibitions imposed on selective distributors against selling on non-authorised third-party platforms (Amazon, eBay) for luxury products.

1.3 Franchise

A franchise is a contract by which a franchisor grants an independent franchisee, against direct (entry fee) or indirect remuneration (ongoing royalties), the right to operate a coherent system comprising: the use of distinctive signs (trademarks, signage, logos), the transfer of substantial, secret and identified know-how, and ongoing commercial or technical assistance throughout the contract.

The European Code of Ethics for Franchising and French case law define transferable know-how: it must be substantial (providing a significant competitive advantage), secret (not immediately accessible) and identified (formalised in an operating manual or technical documents). The absence of genuine know-how is a frequent cause of annulment of franchise contracts for substantial error.

2. The precontractual disclosure document (DIP)

Article L. 330-3 of the Commercial Code (Doubin Law of 31 December 1989) requires the franchisor to deliver to the prospective franchisee, at least twenty days before signing the contract or before any payment, a precontractual disclosure document (DIP). This document, the content of which is specified by Article R. 330-1, must include in particular:

• Identification of the franchisor, its seniority, its directors, its annual accounts for the last two financial years;
• History of the brand and state of the network (number of franchisees, entries and exits over the last three financial years, significant litigation);
• General and local state of the market (competition, development perspectives);
• Financial elements of the contract (entry fee, royalties, duration, exclusivity, renewal conditions);
• Main obligations of the franchisor and the franchisee.

The absence of a DIP, its late delivery or inaccurate or misleading content may result in nullity of the franchise contract for vitiated consent (fraud or substantial error), with reciprocal restitutions and compensation of the franchisee for losses suffered. The Court of Cassation specified that the DIP must include a realistic operating forecast based on the actual experience of the network; a manifestly overvalued forecast engages the franchisor's liability even in the absence of bad faith.

3. Contractual obligations of the franchisor and the franchisee

3.1 Franchisor's obligations

The franchisor must effectively transfer the agreed know-how (initial training, operating manual, opening support), provide ongoing assistance (continuing training, network animation, operational advice), defend the trademark and signage (combat counterfeiting, control use by franchisees), respect the granted territory in case of territorial exclusivity, and supply agreed products under transparent and non-discriminatory conditions.

3.2 Franchisee's obligations

The franchisee undertakes to scrupulously respect the concept (graphic charter, layout, sales methods, product range), pay royalties under agreed terms, protect the confidentiality of transferred know-how, follow training imposed by the franchisor, communicate accounting and commercial information necessary for network steering, and comply with any exclusive supply obligations compatible with competition law.

4. Termination of the relationship and post-contractual clauses

4.1 Duration and renewal

The Macron Law of 6 August 2015 (Article L. 341-1) requires that all agreements binding an independent merchant to a network (franchise, concession, affiliated commission) sharing the common purpose of operating a store and containing clauses likely to restrict the merchant's commercial freedom upon expiration or termination must provide for a common expiry date. This provision aims to prevent artificial chaining of long-term commitments.

4.2 Post-contractual non-reaffiliation clause

Article L. 341-2 of the Commercial Code strictly limits clauses restricting the franchisee's freedom after termination: they are valid only if they concern goods and services in competition with those covered by the contract, are limited to the land and premises operated during the contract, are indispensable to the protection of the substantial and specific transferred know-how, and have a maximum duration of one year after termination.

4.3 Abrupt termination

Article L. 442-1, II of the Commercial Code sanctions abrupt termination, even partial, of an established commercial relationship, without written notice taking into account in particular the duration of the relationship and respecting the minimum notice determined by reference to commercial usage. The Egalim 2 Law capped the required notice at a maximum of eighteen months, save particular circumstances. The remedy is full compensation of the prejudice, generally calculated on the basis of the gross margin the victim would have generated during the missing notice period.

5. Vertical restraints and EU competition law

5.1 Regulation (EU) 2022/720

The 2022 Vertical Block Exemption Regulation (VBER), applicable since 1 June 2022, and its guidelines frame agreements between suppliers and distributors under Article 101 TFEU. Agreements benefit from automatic exemption when the market shares of the supplier and the distributor each do not exceed 30% on the relevant markets. Above this threshold, case-by-case analysis is required, integrating alleged efficiency gains against the restrictions imposed.

5.2 Hardcore restrictions

The following are absolutely prohibited (hardcore restrictions) triggering inapplicability of the exemption:

• Imposing a fixed or minimum resale price on the distributor (maximum prices and recommended prices remain lawful under conditions);
• Absolute restrictions on passive sales: prohibiting the distributor from responding to spontaneous orders from customers located outside its territory or customer group;
• Restrictions on online sales (Macron Law, Coty case law, Pierre Fabre);
• Restrictions on cross-supplies between authorised selective distributors.

5.3 Dual distribution and online platforms

The 2022 VBER reform clarified the treatment of dual distribution (situation where the supplier itself sells directly to consumers in parallel with its network). Information exchanges between supplier and distributor in the context of dual distribution are admitted when they are objectively necessary for the implementation of the vertical agreement. Most-favoured-nation parity obligations imposed by online platforms on sellers are subject to enhanced framing.

6. Recurrent litigation

The most frequent disputes in distribution and franchise concern: nullity of the franchise contract for insufficient DIP or overvalued forecast, abrupt termination of an established commercial relationship (concession, franchise, selective distribution), challenge of post-contractual clauses (non-compete, non-reaffiliation), abusive de-listing of a distributor, refusal of approval in selective distribution, imposition of resale price, validity of restrictions on online sales, and the fate of stocks and investments at end of contract.

Litigation on abrupt termination is centralised before eight specialised first-instance courts and the Paris Court of Appeal on appeal (Article D. 442-3). Actions for nullity of franchise contracts fall within the jurisdiction of the commercial court of the defendant's place of establishment or the place of signature.

7. 2025-2026 trends

Several developments mark distribution law in 2026:

• Strengthening of platform regulation: progressive application of the Digital Markets Act (DMA) and the Digital Services Act (DSA), framing the obligations of large online distribution platforms;
• Increased scrutiny of territorial restrictions: the European Commission and the French Competition Authority strengthen controls on practices restricting cross-border and online sales;
• Evolving franchise case law: multiplication of disputes based on inadequate DIP, failure of ongoing assistance and loss of transferred know-how;
• Sustainability agreements: progressive recognition by competition authorities of cooperation agreements between distributors targeting sustainability objectives.

Conclusion

French distribution law in 2026 articulates a composite framework combining general contract law, specific provisions of the Commercial Code (Doubin Law, Macron Law, Article L. 442-1), EU competition law and evolving case law. Securing the legal framework of a distribution network requires particular attention to contractual classification, drafting of sensitive clauses, compliance with VBER thresholds and restrictions, and rigorous documentation of the relationship to anticipate post-termination disputes.

Mac Mahon Avocats advises suppliers, network heads, franchisors, franchisees, distributors and commercial agents in the structuring, negotiation and defence of their distribution contracts, in France and internationally.