Mac Mahon Avocats is a Paris business law firm at 33 avenue Mac-Mahon, Paris 17. Its lawyers advise restaurants, cafés & bars businesses on prevention of difficulties, out-of-court procedures, formal insolvency proceedings and distressed disposals under French law. This page sets out the applicable legal framework; it does not constitute legal advice.
Traditional and fine dining restaurants, brasseries, cafés, bars and themed bars, fast food and takeaway, dark kitchens, tea rooms, caterers and event catering, franchisees and multi-site groups.
Independent food service is marked by high fixed costs (rent, energy, payroll) against margins sensitive to food prices, and by cash receipts that can mask deferred tax and social security liabilities. The business goodwill, the commercial lease and the alcohol licence make up most of the transferable value, so their treatment drives the outcome of any restructuring. Difficulties commonly arise from accumulated social security and VAT arrears, unamortised fit-out investment or falling footfall — situations where confidential out-of-court procedures allow debt to be rescheduled before cessation of payments.
| Procedure | Entry condition | Duration | Legal basis |
|---|---|---|---|
| Ad hoc mandate | No cessation of payments | Set by the court president, renewable | Art. L. 611-3 Commercial Code |
| Conciliation | Actual or foreseeable difficulties; cessation of payments for 45 days at most | 4 months + 1 month | Arts. L. 611-4 to L. 611-16 |
| Safeguard | Insurmountable difficulties, no cessation of payments | Observation period 6 months, extendable to 12 | Art. L. 620-1 et seq. |
| Rehabilitation | Cessation of payments, recovery possible | Observation period up to 18 months | Art. L. 631-1 et seq. |
| Liquidation | Cessation of payments, recovery manifestly impossible | Variable; business continuation 3 months, renewable | Art. L. 640-1 et seq. |
A declaration of cessation of payments must be filed within 45 days of that state arising, unless a conciliation request is filed within the same period (Art. L. 631-4 of the French Commercial Code).
The opening judgment bars termination claims based on pre-opening rent and stays pending proceedings (Art. L. 622-21 Commercial Code). The landlord may, however, seek termination for non-payment of rent relating to occupation after the judgment, under the conditions of Art. L. 622-14.
An alcohol licence attaches to the operation, and its transfer or relocation is governed by notification and location rules under Arts. L. 3332-3 et seq. of the Public Health Code. A licence not operated for more than five years lapses (Art. L. 3333-1), which must be checked before any sale.
The CCSF (committee of heads of financial services) may grant a staggered plan for tax and social security debt on the company's application. This is frequently combined with an ad hoc mandate or conciliation, both of which remain confidential.
Yes. Rehabilitation opens an observation period during which the business continues (Art. L. 631-14, applying the safeguard rules) under the supervision of the officers appointed, so that a continuation plan or a sale plan can be assessed.
Forty-five days from the date that state arises, unless a conciliation request is filed within the same period (Art. L. 631-4 of the French Commercial Code).
Phone: +33 1 45 03 20 20
Email: accueil@macmahon-avocats.fr
Address: 33 avenue Mac-Mahon, 75017 Paris, France