Franchise, PDD, significant imbalance, L442-6 I 2°, an educative Appeals Court decision
The Appeals Paris Court dismisses the grievance of fraud raised by a franchisee on the following grounds:
- if the franchisor is not required to communicate to the future franchisee financial forecasts, when the franchisor hands such a document over to the franchisee, the information contained therein must be sincere and established seriously; in this matter the PDD received by the franchisee indicated that the franchisor had been recently registered and the list of franchisees contained only one name, so that the future franchisee could not be unaware that he was participating in the formation of the network which was then very recently constituted ;
- the market presentation made in the PDD was incomplete, because not specifying any state of competition in the area of franchisee location and not providing any information on its economic dynamism, but the franchisee had to proceed himself to a precise market study enabling it to assess the potential and, hence, the viability of the business which it intended to create;
- the PDD contained a simulation of forecast accounts, headed with the indication: « Beware: this is just a simulation. It is up to the candidate for the franchise, like any entrepreneur, to make his own forecasts with a view to making an informed decision « , so that the attention of the future franchisee was drafted to consider these accounts with caution;
- franchisees located in an area close to the claimant, actually exceeded or approached the figures given in the forecast provided by the franchisor.