From a business perspective, the franchise sector has continued to grow. According to the 2018 report of the Spanish Federation of Franchisees, Spain has 1,348 franchises, of which about 82.8% are Spanish and the rest come from 26 different countries, with France, Italy and the United States being the main countries. This represents an increase of 108.7% since 2001. Fashion is the main market followed by hotels and restaurants. If the contract has an indefinite duration, either party may terminate the contract by notice. Since there is no legal standard governing the duration of prior notification, it should be sent within a reasonable time, due to the circumstances of any agreement. Nevertheless, under the Unfair Competition Act, the termination of a business relationship without prior written and precise notice, carried out at least six months in advance, may be considered abusive, except in cases of serious infringement or force majeure. A franchise agreement can have a fixed term or an indefinite duration. If the contract has a fixed term, it expires at the agreed term.
It can also be terminated in the event of breach of contract, death (in the case of individuals) or liquidation of one of the parties (in the case of companies). In addition, these prohibitions do not apply (Article 5) to small restrictions under the Competition Regulation, in particular where the participants in the agreement do not have a market share of more than 10% or 15% (depending on whether the participants are competitors). The parties are free to design a franchise agreement in any way and it is not necessary to execute it in any given language or to be notarized. In addition, there are no mandatory clauses that must be included in a franchise agreement. Disclosure is only required once. There is no obligation to advertise before the opening of additional points of sale by the same franchisee. Under Spanish legislation, the following companies are expressly excluded as franchisees: from December 2018, it is not necessary for a franchisee to register in a specific national register. However, some regional rules may require registration at the regional level, but only if the franchisee intends to operate exclusively in that region. There is no obligation to register franchise agreements. Foreign franchisors can operate in Spain without special permission. In addition, other administrative obligations (such as registration in the register of franchisors or the necessary updates) are no longer necessary as a result of recent amendments to the Retail Trade Act.
Therefore, a non-Spanish company has no restrictions on granting master franchise or development rights to a local franchisee or master`s franchisee. . . .