CASE COMMENTS : DISTRIBUTION – FRANCHISING – KNOW HOW – APPRECIATION OF THE CONTENT OF THE KNOW-HOW

Franchising: The Court of Cassation overturns an appellate court decision holding that a franchising contract was null and void given the lack of secret know-how without seeking if the franchisee benefited from it ; while the Paris Court of Appeal holds, firstly, that the franchisor had communicated an “instruction book” and provided a training to the franchisee so that the contract was not null and void and, secondly, that the lack of originality “could not deny the value of the know-how whereas the franchisor could prove the communication of useful information for the activity” (DS and HFS, Eurotel/Dynamique Hotels Management, ADL/COFF and Auvence)

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. Cass. com, May 3, 2012, stés DS et HFS et consorts Z... n° 11-14291 Know-how is an essential element of franchising, which has been characterised since its first recognitions by the availability of know-how and, in correlation, of well-known distinctive signs (cf. in particular TGI Bressuire, 19 June 1973, D. 1974, p. 105, note F. Bories). However, know-how itself has always been loosely defined as a "set of business methods which are likely to underpin the success of the franchisor" (CA Paris 24 January 1975, PIBD 1975, 3, 323), or a "secret, substantial and identified set of non-patented practical information resulting from the experience of the supplier

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  • University of Montpellier

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Didier Ferrier, Franchising: The Court of Cassation overturns an appellate court decision holding that a franchising contract was null and void given the lack of secret know-how without seeking if the franchisee benefited from it ; while the Paris Court of Appeal holds, firstly, that the franchisor had communicated an “instruction book” and provided a training to the franchisee so that the contract was not null and void and, secondly, that the lack of originality “could not deny the value of the know-how whereas the franchisor could prove the communication of useful information for the activity” (DS and HFS, Eurotel/Dynamique Hotels Management, ADL/COFF and Auvence), 3 May 2012, Concurrences N° 3-2012, Art. N° 48378, pp. 125-126

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