28 Amendments of Maria GRAPINI related to 2016/2244(INI)
Amendment 1 #
Motion for a resolution
Recital A
Recital A
A. whereas there is no common European definition of franchising, but it normally involves and franchising agreements differ from one business to another, while franchising normally includes specific basic common elements, namely a partnership between natural or legal persons that are legally and financially independent of each other, whereby one party (the franchisor) grants to the other party (the franchisee) the right to operate his franchising formula to sell goods and/or services, and shares know- how, and the provision of commercial and technical assistance on the part of franchisor to the franchisee for the duration of the agreement; the intention of both the franchisor and the franchisee being to generate business revenue;
Amendment 6 #
Motion for a resolution
Recital B
Recital B
B. whereas in its resolution of 11 December 2013, Parliament welcomed franchising as a business model which supports new business and small-business ownership, but noted the existence of unfair contract terms in certain cases and called for transparent and fair contracts; moreover, it drew the attention of the Commission and Member States, in particular, to problems faced by franchisees wishing to sell their business or change their business formula, whilst remaining active in the same sector and requested that the Commission examine the ban on price-fixing mechanisms in franchise systems and the effects of long- term competition clauses, purchase options and the prohibition of multi-franchising, and to reconsider in this respect the current exemption from competition rules for contracting parties having a market share of less than 30 %; however this request remained unanswered;
Amendment 10 #
Motion for a resolution
Recital C
Recital C
C. whereas franchising has the full potential of being a business model that can help in completing the single market in the retail sector as it can be a convenient means to establish business through a shared investment of franchisor and franchisee, but is currently under- performing in the EU, representing only 1.89 % of GDP, as opposed to 5.95 % in the USA and 10.83 % in Australia, 83.5 % of franchising’s turnover being concentrated in only seven Member States;
Amendment 13 #
Motion for a resolution
Recital D
Recital D
D. whereas franchising has a significant cross-border dimension and is of importance for the functioning of the internal market, but existing legislation covering franchising as a business model varies widely between Member States, and franchisees may refrain from entering into cross-border franchise networks, because they are not familiar with other legal systems and may not be protected against unfair trading practices; whereas in turn this can have an impact on the entire EU economy, as well as on final consumers by limiting their choice;
Amendment 18 #
Motion for a resolution
Recital D a (new)
Recital D a (new)
D a. Whereas the self-regulatory environment in the EU is weak due to poor enforcement by national franchisee associations of the European Code of Ethics and the low representativeness of those associations;
Amendment 21 #
Motion for a resolution
Recital E
Recital E
E. whereas there are differences between ‘hard’ and ‘soft’ franchising, depending on the conditions of the franchising agreement; and, moreover, alternative business models such as ‘groups of independent retailers’ have special characteristics and should only be affected by rules governing franchising, insofar as they meet the definition of franchising;
Amendment 26 #
Motion for a resolution
Recital G
Recital G
G. whereas, in the context of the realisation of the digital single market specific attention should be paid to the tensions which have arisen between franchisors and franchisees with respect to e-commerce and the sharing of consumer data, since currently franchise agreements do not contain provisions on these subjects and thus lead to unnecessary uncertainty and conflicts, and digitalisation of the economy is largely ignored by Regulation 330/2010 and its accompanying directives;
Amendment 30 #
Motion for a resolution
Recital G a (new)
Recital G a (new)
G a. Whereas the franchisor has to prove serious breach of contract or ethics by the franchisee in order to unilaterally decide not to renew the contract or to award the franchise to another person or company in the same territory, in particular if the franchisee has been successfully operating the franchise for the duration of the agreement, during which time considerable investment in growing the brand and enhancing its goodwill has taken place;
Amendment 31 #
Motion for a resolution
Recital G a (new)
Recital G a (new)
G a. Whereas, the Commission has defined unfair trading practices as "practices that deviate grossly from good commercial conduct, are contrary to good faith and fair dealing and are unilaterally imposed by one trading partner on another"1a; _________________ 1a"Tackling unfair trading practices in the business-to-business food supply chain", COM(2014)472.
Amendment 32 #
Motion for a resolution
Recital G b (new)
Recital G b (new)
G b. Whereas the "fear factor" comes into play in commercial relationships, with the weaker party being unable to make effective use of their rights and unwilling to lodge a complaint about unfair trading practices imposed by the stronger party, for fear of compromising their commercial relationships;
Amendment 33 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Considers that for the completion of the single market in the retail sector, franchising can play an important role, provided that effective protection of both franchisors and franchisees against unfair trading practices is offered throughout the EU; however, this is not currently the case, as different measures exist between Member States, leading to a high degree of divergence and diversification between Member States in terms of the level, nature and form of legal protection;
Amendment 39 #
Motion for a resolution
Paragraph 1 a (new)
Paragraph 1 a (new)
1 a. Envisages that in view of the strong-border component in franchising, a uniform approach to correct unfair trading practices at EU level is advisable;
Amendment 44 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Emphasises that franchisees are often the weaker contracting party, especially when they are representatives of SMEs, as the franchise formula has normally been developed by the franchisor and franchisees tend to be financially weaker and less well-informed than the franchisor and therefore heavily dependent on the expertise of the franchisor;
Amendment 49 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. States that franchisors have organised themselves both at national and European level for the representation of their interests, whereas often due to a lack of resources, franchisees often lack such representative organisations and adefending their collective interests, continuing to operate mostly on an individual basis and are therefore under- represented;
Amendment 50 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. States that franchisors have organised themselves both at national and European level for the representation of their interests, whereas often due to a lack of resources, franchisees often lack such representative organisations and are under- represented, vulnerable and at higher risk when it comes to fair trade being respected;
Amendment 56 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Calls on the Commission and Member States to promote the creation of associations representing franchisees, and to make sure that their voices are heard, whenever policies or legislation are prepared that may affect them, in order to ensure more equal representation of the parties;
Amendment 57 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Calls on the Commission and Member States to promote and foster the creation of associations representing franchisees, and to make sure that their voices are heard, whenever policies or legislation are prepared that may affect them;
Amendment 63 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Emphasises that there is a persistent lack of information on the functioning of franchising in the retail sector and calls on the Commission to open a contact point for information on problems encountered by franchisees, whilst guaranteeing the confidentiality of the information thus acquired and ensuring the competent authorities take action to resolve those problems;
Amendment 68 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5 a. Encourages the setting-up of national and European franchising associations recognized as legally- acknowledged sources of best practice in franchising, ensuring a balance of membership between franchisors and franchisees;
Amendment 73 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6 a. Expresses its concern that, given the weaker status of franchisees, unfair trading practices can also consist in franchisors unilaterally deciding not to renew a long-standing franchise agreement, causing serious financial damage to the investment of the franchisee in the franchise property, fittings, advertising and goodwill, thereby jeopardizing employment, especially if the intention and reason for non-renewal is for the franchisor to award the franchise to another person or company in the same territory, even though the franchisee has consistently and fully abided by the agreement;
Amendment 89 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. States that franchise agreements shouldmust fully respect the principles of balanced partnership, under which the franchisor and franchisee must be reasonable and fair towards each other and resolve complaints, grievances and disputes through frank, reasonable and direct communication;
Amendment 97 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Calls on the Commission to examine complaints it receives through a contact point or otherwise and to draw up a non-exhaustive list of unfair trading practices based on this information, and the measures that need to be taken;
Amendment 100 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Points, in particular, to the need for specific principles to ensure the balanced contractual rights and obligations of the parties, such as clear, correct and comprehensive pre-contractual information, including information on the franchise formula’s performance, both general and targeted towards the franchisee’s envisaged location, and clear limits concerning the confidentiality requirements, to be available in writing at least 15 working days prior to the signing of the agreement, and the introduction of a five-day cooling- off period after execution of the agreement; the obligation for the franchisor to ensure that the duration of the contract allows the franchisee to cover his investment; continued commercial and technical assistance from the franchisor to the franchisee for the duration of the agreement; and fair indemnities at the end of the contract;
Amendment 118 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15 a. Notes with concern that parallel importation of franchised products seriously undermines and jeopardizes territorial exclusivity agreements and pollute and contradict the franchising model to the detriment of the franchisees, and holds the franchisors responsible if such importation into the territory is within their capability to control and prevent;
Amendment 121 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Notes with concern the disputes arising about internet sales, as they are vital in the digital market, whereas the power of the franchisor and the franchisee is often very unbalanced, and traditional franchise agreements do not take into account the effect internet sales may have on exclusivity clauses, thus making it possible that in the area for which the franchisee has the right of exclusivity, customers may buy their products from the franchisor, even if they pick up the goods in the franchisee’s shop; recalls that efforts should be made to prevent internet sellers from developing unfair competitive advantages vis-a-vis franchisees;
Amendment 124 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16 a. Expresses its concerns about the use of consumer data collected via the franchisee; asks the Commission to take into consideration the digital components of the business model in its further actions;
Amendment 126 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. RequestUrges the Commission to draft guidelines reflecting best practices on the functioning of franchising in the retail sector; invites the Commission in this respect to, open a public consultation in order to obtain unbiased information as to the real situation in franchising, then to make an analysis of the existing self- regulatory instruments as well as of legislative practices of Member States in the field of franchising in the retail sector and to submit its findings to Parliament, including recommendations for further action, focusing on the need for effective enforcement;
Amendment 132 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Requests the Commission to draft guidelines reflecting best practices on the functioning of franchising in the retail sector; invites the Commission in this respect to make an analysis of the existing self-regulatory instruments as well as of legislative practices of Member States in the field of franchising in the retail sector and to submit its findings to Parliament, including recommendations for further action, focusing on the need for effective enforcementand harmonised enforcement in the 28 Member States;