Franchising Attorney

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An Experienced Franchising Attorney

Dr. Ganna Tsirat, a certified franchise law attorney, is a leading expert in franchise agreements in Ukraine. Her scientific research was devoted to the comparative analysis of franchise agreements regulation all over the world. As a result, she has issued two books on franchising: Franchise and Franchising agreements in 2002 and Guidance on the draft of franchise agreements in 2010.

What’s more, Dr. Ganna Tsirat is a permanent author on chapters on Ukraine in The Getting the Deal Through where she has written on Franchise and Licensing. Kluwer Law International, a world-leading publishing house of legal literature, ordered her a monograph On Intellectual Property in Ukraine.

Being a recognized franchising attorney, Dr. Ganna Tsirat is working with the world-known brands. Her recent international franchisors are ECCO, Engel & Völkers Property Shop, Gloria Jean’s Coffees, Mustang, Papa John’s, L.Carvari, Pizza Celentano and others.

Recognized Franchising Attorney Services

Do you want to develop and execute your own franchise system? Or are you dreaming of establishing long-lasting working relations with a franchisor to build a prosperous business? In any case, you can’t do without reliable franchising attorney services. Jurvneshservice is here to offer you a full set of professional franchise law attorney services all in one place. This means that with Jurvneshservice you get franchise law attorney assistance with any legal services related to franchise, licensing, and distribution.

Jurvneshservice has been Ukraine’s leading firm in franchise law for more than 15 years. With profound experience in the field, we provide qualified franchising attorney services to both franchisors and franchisees. Therefore, whatever party you represent, with Jurvneshservice you get a reliable franchise law attorney to protect your business rights while promoting franchise relationships. Whether you are starting a franchise business or are an experienced franchisor, we are here to become the trustworthy franchising attorney you need.

Franchising in Ukraine

Franchising as a marketing method to expand a business is well known in Ukraine now. However, if you are not an expert in this field, it’s a good idea to consult a qualified franchising attorney before going for it.

Since 2004 franchisor and franchisee relationships are regulated through the Civil Code of Ukraine where a special chapter 76 is devoted to agreements of commercial concession, a Ukrainian analogue of single-unit franchise agreements. Any experienced franchising attorney will tell you that Ukrainian regulation of franchise relationship is much closer to that used by the Commission Regulation (EEC) No 4087/88 of 30 November 1988 that was substituted with Block Exemption Regulation on vertical agreements than to those proposed by American states.

Ukrainian Civil Code defines the franchise as a certain complex of rights granted by the franchisor to the franchisee. The complex of rights includes intellectual property objects, like trademarks, patents, utility models, know-how, experience and business reputation of the franchisor. It is understandable that business reputation belongs to the category of the personal intangible rights which are unalienable ones and may not be handed over to any other person. As a result, the franchisor does not perform any actions to grant its business reputation, just all his recommendations to franchisee as well as following of his system are directed to make franchisee’s enterprises to be associated with the enterprises of the franchisor.

The Minimum Content of the Franchise Agreement

  1. Description of the franchise;
  2. The price of the franchise that includes determination of franchise payments, royalties for usage of objects of intellectual property rights, the amount of the franchisee’s investment in its own enterprise, the amount of payment for services rendered by the franchisor and the amount of its contribution to the advertising activities carried out by the franchisor;
  3. The term;
  4. The regime of franchise usage (exclusive, non-exclusive, single);
  5. The territory for franchise usage;
  6. The list of limitations to the parties’ rights under the franchise agreement and the term of such limitations.

The Ukrainian law allows parties to choose any law, including a foreign one. In case the Ukrainian law is chosen the parties may derogate from the regulation provided for franchise agreements in the Ukrainian Civil Code and be guided by the franchise agreement only. This derogation must be expressed clearly in the agreement.

At Jurvneshservice, we have extensive experience helping franchisors and franchisees create agreements and resolve conflicts. So, don’t hesitate to make use of our franchising attorney services any time the issue occurs.

Disclosure Requirements

Ukrainian legislation does not contain an exhaustive list of items to be disclosed by the franchisor to the franchisee at pre-contractual stage. The Ukrainian requirements are quite vague and unclear but according to them before franchise agreement execution franchisee’s will “shall be free, formulated and correspond to its inner intention” not to treat an executed transaction as invalid one due to made under franchisee’s mistake or under franchisor’s deception or fraud.

Thus, the franchisor may circulate to the franchisee the disclosure information used for their own markets or international operations with a requirement to discuss it with franchisee’s consultants and advisors within the cooling period for the franchisee to fully understand the meaning of its actions directed to franchise agreement execution.

Due to the confidential nature of the franchise and arising of any dispute a Ukrainian franchisee may declare that in fact, it did not understand the “real” value of the purchased franchise. If its position in a court (depending on circumstances in which the franchise agreement has been concluded) is effective, it easily receives both a termination of franchise agreement through its declaration as void and a  judgment for full compensation of all investments made into its franchise unit.

If the franchisee or his franchising attorney is able to prove that franchise transaction is executed under deception or fraud the franchisor will be obliged to compensate the franchisee with doubled losses and moral damage caused by the transaction execution. As soon as a franchisor is treated as a seasoned businessman which shall fairly deal with its counteragent the court may emphasize on its obligation to warn a franchisee on possible risk of franchise activities as well as on other matters peculiar to the franchise business.

Renewal and Termination

The Code fixes preference for the franchisee in comparison with other subjects of business as to the possibility to conclude franchise agreement for a new term, namely if the franchisee duly fulfills its obligations under the agreement it should have the right to renew this agreement for a new term under the same terms and conditions.

The Code prescribes that, upon the respective conditions which should be envisaged by the special law on franchising, the franchisor will be able to compound the conclusion of an agreement for a new term. The law may provide franchisor’s obligation to compensate the franchisee for release from obligation but it is not approved yet.

For open-ended franchise agreements, the legislators prescribe a mandatory minimum term for primary notification about the repudiation of the agreement of 6 months, unless a longer term is provided for by the agreement. There is no prescribed rule for a period of preliminary notification in case of the termed franchise agreement.

In addition to the general grounds for termination of contracts, the legislation provides for additional imperative grounds for termination of franchise agreements, namely termination of rights to trademarks (termination of the right to designations is not considered as it is not an object of intellectual property rights) and declaring any of the parties insolvent or bankrupt.