Legal Regulation of Franchise Agreement

This graduate paper is aimed at considering the legal status of the franchise agreement in the Russian Federation, which is referred to as the contract of commercial concession in the Civil Code of the Russian Federation. The main objectives of the paper are: a) to define the term “commercial concession”; b) to distinguish the contract of commercial concession from resembling contracts; c) to study the legal nature of the contract of commercial subconcession; d) to examine the rights and obligations of the parties to the contract of commercial concession; e) to analyze the essential terms of the contract; f) to investigate the compulsory rules regarding the form of the contract and the state registration of the transfer of rights. Based on this research the following conclusions were made: firstly, it is possible to agree with the concept, which states that the terms “franchising” and “commercial concession” are the synonyms; secondly, despite having some common features with the resembling contracts, the contract of commercial concession is a separate civil contract; thirdly, the possibility to create subconcessions appears to be an effective method of business expansion; fourthly, the Civil Code of the Russian Federation provides a complete list of imperative obligations of the parties to the contract; fifthly, it is possible to conclude that the essential terms of the contract are the subject matter and the procedure of remuneration; sixthly, the legislation provides the specific regulation of the form of the contract. In contrast to the general rule, if the contract of commercial concession is not concluded in writing it is declared invalid. Apart from this, the transfer of rights to use the exclusive rights in a user’s business operations should be registered in Rospatent.