This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

Article 1(g) of Regulation No 330/2010  defines know-how as “a package of non-patented practical information, resulting from experience and testing by the supplier, which is secret, substantial and identified”. According to the Guidelines on Vertical Restraints , the franchise contract is the best example of disclosure of know-how to the purchasers for commercial purposes. Know-how must be secret  …

Original know-how

Article 1(g) of Regulation No 330/2010  defines know-how as “a package of non-patented practical information, resulting from experience and testing by the supplier, which is secret, substantial and identified”. According to the Guidelines on Vertical Restraints , the franchise contract is the best example of disclosure of know-how to the purchasers for commercial purposes. Know-how must be secret - not known or easily accessible -, substantial - indispensable to the franchisee - and identified - its description must be sufficient to certify its secret and substantial character.

The identification of transferred know-how plays an essential part regarding evidence. Where the know-how is identified by the disclosure of documents to the franchisee, the latter bears the burden of evidence of the absence or non-transmission of know-how. Without such disclosure, the franchisor must establish that it has properly fulfilled its obligations .

Know-how is widely understood and, according to the European Commission, includes every aspect of the franchisor's business “and in particular technical, commercial, promotional, publicity, administrative and financial matters, staff training and general administration” .

The transmission of know-how operates not only during the conclusion of the contract but also during its performance by the updating of the transferred know-how. The franchisor's dual obligation makes it possible to distinguish franchising from the mere licensing of know-how. The lack of immediate transfer of information indispensable to the proper performance of the contract justifies its termination . The maintenance of know-how is essential as part of a franchise contract, a “reiteration contract” with payment of a fee by the franchisee in return for that know-how. The court therefore assesses the reality of such updates in view of the specific elements of each case .

Regulation No 330/2010/EU of 20 April 2010, on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJEU L 102 of 23 April 2010, 1.

Guidelines on Vertical Restraints, par. 43. 

Cass. com., 1 July 2003, LawLex200300003208JBJ: “but the decision finds that Secta delivered to CTM, as soon as the membership contract was signed, various documents that contained a complete description of the Autosur methodology, both regarding the area of technical control and the commercial aspects of the network organization, and made IT software available; by a sovereign assessment the Court of Appeal has deduced from these findings that Secta had transferred substantial know-how to CTM that the latter could have discovered only further to long and expensive personal researches”.

Commission Decision No 87/14 of 17 December 1986, Yves Rocher, LawLex200500004449JBJ, pt 22.

See inter alia CA Paris, 10 March 1989, LawLex200200005737JBJ: “Although, in view of the facts, the will of La Croissanterie to transmit to the franchisee a new and original distribution technique seems certain, it remains that the conditions of performance of that major obligation of the franchisor have not been without defects if one considers especially the extended time frame between the signature of the contracts (1981) and the dissemination of precise technical documents indispensable to the proper exploitation of the transmitted know-how, so that, at the time of the conclusion of the contracts, the technical training of franchisees remained at the empirical stage and was insufficient to guarantee the setting-up and animation of a true network of franchisees, capable of developing and enhancing the techniques transferred by the franchisor”.

CA Paris, 21 June 2006, LawLex200600001846JBJ: the provision of training for a concept of long-term rental, updated during the performance of the contract, expresses the performance by the franchisor of its obligation to transmit the know-how to the franchisee.

French case law places greater emphasis on the “original” nature of know-how than on its “secret” nature, as referred to in the European provisions. However, the difference is relatively insignificant, since in both cases the know-how must not be easily accessible, i.e. it should be acquired only after considerable research, long personal experiences or be formed of data that the franchisee would not have discovered by itself . It must not be accessible even to a professional in the field . It must not be public or common knowledge .

The originality of the know-how is assessed overall on a case-by-case basis . It results from the specific and well-known character of the distributed product , or the franchisor's commercial methods  or its methods of selecting the products in question . While no legal provision makes the existence of the franchise subject to any innovative or original character of the distributed products or the methods used and know-how does not actually have to be patented ,the innovative nature of the services offered, if acknowledged, may contribute to the originality of the know-how . In this respect, the franchisee cannot reproach the franchisor for a lack of innovation when the latter has annually updated various documents and visuals intended for customers, developed a new service, and been ranked among the best brands in the sector by a well-known magazine . The fact that the franchisor is not the only operator in the market does not call into question the originality of its concept . The mere transmission of a body of knowledge, technical diagrams, and operating methods may enable the franchisee to achieve the purpose of the franchise . This is particularly true in service franchises, where the know-how consists more in the supplier’s experience in assembling and using the necessary knowledge and techniques to address difficulties in customer service, than in the originality of the concept . In the hairdressing sector specifically, the franchisee's main interest often consists in the fact of grouping together with others under a name with an undisputed reputation, rather than having an original product . The fact that the same concept has been adapted into two slightly different brand names is not sufficient to rule out the originality of the know-how used .The manufacturing process but also the lay-out, organization and management of the store , or the setting-up of an intranet for a real time management of the network and the preparation of a welcome booklet and work handbooks providing the information necessary to the franchisee's exercise of its activity , are original know-how. This is the case in the bakeries sector where it suffices that the franchisor proposes a special bread as its core product, the concept for which can be distinguished by a specific trademark and the use of an original lay-out in points of sale, even if the techniques implemented are devoid of originality .  Conversely, where the transferred know-how consists in the bread-making process, and the franchisee demonstrates that it amounts to simple tricks of the trade known to professionals and has been widely used since the 1960s, the absence of originality is established . The same applies to know-how in the real estate development sector, which, being made up of generalities and commonplaces, merely reiterates standard practices in the industry, even if the advice given is relevant and sound .

Often, the know-how is transmitted through the provision of those operating manuals, also called “bibles”. The manuals include the “recipes” which should enable the franchisee to reiterate the success previously encountered by the franchisor. Transmitted know-how in the form of a handbook compiling pre-existing sources is original for the franchisee where it can acquire knowledge without personal effort or carrying out research .  Thus, the delivery in 2011—when the e-cigarette market was still marginal—of a manual formalizing the rules for managing stores, staff, and suppliers, commercial promotion, as well as sales techniques, including a comprehensive description of the products, communication and advertising techniques, which demonstrates the franchisor’s thorough and exhaustive understanding of its concept, constitutes the transfer of secret, substantial, and identified know-how .

The fact that the know-how is partly composed of technical or commercial data also used by competitors does not necessarily deprive it of its originality .Thus, documentation in the form of manuals, even if its originality is debatable, supplemented by training periods, is an element of transferable know-how . 

Likewise, the lack of originality of certain information contained in the operations manual provided to the franchisee may be offset by other provisions which, by their significance, precision, and specificity, demonstrate the actual transfer of know-how .

CA Colmar, 9 June 1982, LawLex200200005684JBJ; CA Dijon, 10 October 1990, LawLex200200005802JBJ: know-how formed of various elements separately known but that the franchisee could acquire by itself only after long and expensive research, may be described as original; CA Orléans, 8 September 1997, LawLex200200005038JBJ.

CA Paris, 15 September 1994, LawLex200200005408JBJ; 27 May 1993, LawLex200200006006JBJ.

CA Toulouse, 2 July 2024, LawLex202400005017JBJ

CA Bordeaux, 24 November 2021, LawLex202100006034JBJ, concept of bioclimatic single-family homes delivered ready-to-inhabit at accessible prices.

CA Montpellier, 27 November 2007, LawLex200800000432JBJ.


CA Paris, 7 December 2016, LawLex201700000292JBJ.

CA Paris, 26 November 1992, LawLex200200005958JBJ.

CA Versailles, 19 November 2020, LawLex202000003149JBJ.

T. com. Marseille, 22 January 2001, LawLex200200004697JBJ.

CA Versailles, 20 October 2006, LawLex200800000187JBJ.

CA Aix-en-Provence, 12 January 2011, LawLex201100000124JBJ.

Cass. com., 3 May 2012, LawLex201200000686JBJ; CA Aix-en-Provence, 5 September 2012, LawLex201200002012JBJ.

CA Paris, 11 January 2002, LawLex200200004627JBJ.

CA Chambéry, 9 October 2018, LawLex201800001502JBJ; 3 October 2023, LawLex202300012179JBJ and LawLex202300012431JBJ.

See along the same lines, Cass. com., 13 December 1994, LawLex200200004352JBJ; CA Paris, 17 May 2017, LawLex201700000895JBJ, cf. Cass. com., 10 May 1994, LawLex200200004357JBJ: a franchise agreement is void for lack of consideration when the transfer of know-how is limited to giving the franchisee a manual consisting of trivial information.

CA Caen, 26 November 2020, LawLex202000003450JBJ.

CA Nancy, 14 October 2020, LawLex202000002719JBJ.

CA Colmar, 9 March 1990, LawLex200200005772JBJ: “the respondents do not however seriously challenge that the documentation in the form of handbooks listed in the contract has been provided to them, Henri Cazauran has followed the initial two-week training period also provided for in the contract, a training period relating to the various aspects of the holding of a marital institute, even if the originality of the transferred know-how and the level that Félicitas claims remain personal subjective assessments and may appear challengeable, Henri Cazauran cannot claim a substantial mistake on this issue”.

CA Paris, 28 September 2011, LawLex201100001616JBJ.

CA Lyon, 26 February 1993, LawLex200200005982JBJ.

CA Versailles, 4 July 1996, LawLex200200005588JBJ: regarding distribution franchise, there is transfer of know-how even in the absence of originality of the sales methods, where the products are specific, original and well-known and the franchisor has given advice appropriate to their distribution.

CA Paris, 18 June 1992, LawLex200200005934JBJ.

Cass. com., 8 June 2017, LawLex201700001022JBJ.

CA Versailles, 11 May 2006, LawLex200700002015JBJ; see CA Paris, 20 December 1995, LawLex200200005521JBJ: the absolute originality of transferred know-how is not a condition of validity of the franchise contract.

CA Versailles, 2 September 2014, LawLex201400000862JBJ.

CA Paris, 12 January 2022, LawLex202200000321JBJ, in the optics sector, offer of 15-minute assembly, virtual mirrors, highly affordable branded products or an integrated bar.

French Distribution Law

385. Original know-how

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385. Original know-how

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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