Labor Law reform (el-Khomri Act) : effects on franchising agreements

The provisions of the initial act were revised before adoption. Two conditions apply:

• A network of franchise operators of at least three hundred employees in France (remarkable error in the provision. It reads as follows « operators bound by a franchise agreement referred to in Article L. 330-3 of the Commercial Code », but the term “franchising” is not used there…)

• A contract with « clauses that affect the organization of work and working conditions in franchised businesses ».

Should a representative trade union organization within the branch or one of the branches of which network companies are or having formed a trade union section in a company of the network, requests it, the franchisor puts in place negotiations to create a body of social dialogue in the entire network, including representatives of employees and franchisees and chaired by the franchisor. The agreement setting up this body provides its composition, the modalities of appointment of its members, the duration of their term, the frequency of meetings, the delegation of hours granted to participate in this proceeding and how to use them. A decree will determine the concerned characteristics.

Failing reaching such agreement:
1. The number of the meetings shall be two per year;
2. The decree referred to in the paragraph above.

The dialogue body members are provided with material or financial resources necessary to accomplish their missions. The operating expenses for the organization of the meetings and the costs of travel and accommodation will be paid pursuant to the agreement or, failing that, by the franchisor. At its first meeting, the instance adopts rules of procedure defining its operating procedures. At the meetings mentioned in the second paragraph and 1 of this I, the instance is informed of the decisions of the nature of the franchisor to affect the volume or structure of the workforce, working hours or conditions of employment, work and of vocational training of employees of franchisees. It is informed corporate entry into a network or having left.

The instance proposes, at his initiative, and shall, at the request of the franchisor or franchisee representatives, makes  proposals meant to improve working conditions, employment and vocational training of employees in the entire network and the conditions under which they receive additional collective guarantees mentioned in Article L. 911-2 of the code of social security.

Trade unions and professional organizations in the sectors concerned establish a review of the implementation of this article and send it to the National Collective Bargaining Commission no later than eighteen months after the enactment of this Act.

Frédéric Fournier
Partner