We receive the Pre-Contractual Information Document (DIP), we skim through the projected revenues, we sign, and six months later we discover that the concept has changed between the delivery of the DIP and the signing of the contract. This scenario was addressed by the Court of Cassation on June 26, 2024 (decision no. 23-14.085), reminding us that the DIP must remain updated until the signature. Starting from this legal constraint allows us to establish the true framework of a franchise project.
Verification of the DIP in franchising: what recent case law changes
The DIP is not an administrative formality to be filed away. Article L. 330-3 of the Commercial Code requires the franchisor to provide a sincere, complete document at least twenty days before the signature. The novelty lies in the interpretation made by the courts.
The Rennes Court of Appeal, in a decision dated February 10, 2026 (no. 24/06931), extended this obligation of information to contracts that do not even bear the name “franchise.” As soon as there is the provision of a brand or sign with exclusivity or quasi-exclusivity, the obligation of pre-contractual information applies, regardless of the label of the contract.
When examining a DIP, we check three things above all: the date of drafting, the consistency of the financial data with the reality of the network at the time of signing, and the presence of all the elements listed by the Commercial Code.
If a significant event occurs between the delivery of the document and the signing (closure of points of sale, change of management, collective proceedings of a major franchisee), the franchisor must update the DIP. A document that is accurate at the time of delivery may become insufficient a few weeks later.
To succeed in their franchise project, we start by treating the DIP as a living document, not as a commercial brochure.
Franchise contract and post-contractual clauses: operational pitfalls
The franchise contract sets the rules of the game during the collaboration, but also afterwards. Article L. 341-2 of the Commercial Code regulates post-contractual restrictive clauses, particularly non-compete clauses. They are rarely read carefully at the time of signing, and that is a mistake.
A post-contractual non-compete clause must meet strict conditions to be valid: it must be limited in time, in space, and proportionate to the protection of the know-how transmitted. If it is too broad, a court may deem it abusive. If well drafted, it can prevent a former franchisee from engaging in the same activity in their former territory for one to two years.
Reading the contract line by line before signing is not optional. It is recommended to be accompanied by a lawyer specialized in distribution law, not a generalist. Feedback on this point varies across networks, but a franchisor who refuses to allow their candidate to consult a lawyer sends a negative signal.
Royalties and recurring costs of the network
The entry fee captures all the attention of candidates, while it is the monthly royalties that weigh on cash flow on a daily basis. We generally distinguish:
- The operating royalty, calculated as a percentage of revenue, which compensates for the use of the brand and the ongoing support from the franchisor.
- The advertising royalty, intended for the national or regional communication fund of the network, which the franchisee does not control the allocation of.
- The mandatory supply costs from listed suppliers, sometimes higher than market prices, which compresses margins.
Adding up all recurring charges before building your forecast avoids unpleasant surprises in year two, when the novelty effect fades.
Initial training and franchisor support: what can be realistically expected
The initial training provided by the franchisor varies greatly from one network to another. Some offer several weeks of immersion in a pilot point of sale. Others settle for a few days in a classroom, with an operational manual handed out at the end of the session.
The operational manual (sometimes called the “bible” of the network) constitutes the core of the transmitted know-how. It is this document that legally justifies the very existence of the franchise. If the know-how is not substantial, secret, and identified, the contract may be reclassified, and the franchisee may request nullity.
A good network trains in the field, not just in theory. This point can be verified by directly contacting active franchisees. The DIP contains the list of network members: calling three or four of them to assess the actual quality of training and daily support remains the most reliable approach.
Choosing a franchise network: concrete selection criteria
Many candidates compare networks based on the entry fee and the brand’s notoriety. These are visible criteria, but not the most discriminating. Here’s what matters on the ground:
- The contract renewal rate: a network where the majority of franchisees renew at the end of the term indicates a balanced relationship.
- The evolution of the number of points of sale over the last three years: steady growth indicates a functioning concept, while a sudden increase may signal overly aggressive recruitment without sufficient support.
- The presence of a dedicated network facilitator, with a reasonable ratio of franchisees per facilitator: beyond a certain load, monitoring becomes formal.
- Transparency regarding the franchisor’s own accounts, which the DIP must contain.
The French franchise market shows a trend towards the concentration of networks. The most structured brands absorb or marginalize the smaller ones. Joining a financially solid network offers better protection than a tempting concept supported by a fragile structure.
Development in rural areas or medium-sized cities
The attractiveness of a territory is not limited to population density. Some franchise concepts, particularly in personal services or construction, perform better in suburban areas than in congested city centers. We assess the actual catchment area, not the theoretical area provided by the franchisor.
A well-calibrated franchise project relies on a contract that is read and understood, a DIP verified at the date of signing, and a network whose current franchisees confirm the quality of support. The rest is business, and it is built point of sale by point of sale.
