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8 October 2015

Regulation of distribution networks by Macron law

The law n° 2015-990 of August 6, 2015 for Growth, Activity and Equal Economic Opportunity (“Macron law”) which came into force on August 8, 2015, sets forth new provisions in the distribution sector and therefore in the franchise networks. Herewith are summarized in few paragraphs the main changes brought by Macron law.

Framework of contractual relationships between distribution networks and retailers affiliated to those networks (new Articles L. 341-1 and L. 341-2 of the French commercial code)

New Article L. 341-1 of the French commercial code has been introduced in order to facilitate independent retailers to switch from a distribution network to another.

In 2010, the French Competition Authority issued a report regarding the grocery market (n° 10-A-26 of December 7, 2010) which highlighted the existence of restrictive effects on competition for retailers resulting from their affiliation to networks.

New Article L. 341-1 of the French commercial code applies to agreements concluded between:

  • an individual or a corporate entity grouping retailers; and
  • any person operating, on its own behalf or on behalf of another party, a retail store.

To the extent that such agreements:

  • have as common purpose the operation of this store ; and
  • contain clauses likely to limit the freedom for the retailer to operate his commercial activity.

As of August 2016, the agreements falling into the definition of Article L. 341-1 shall have a common expiration date.

They will thus have to provide for a common expiration date if they are entered into with a fixed term. If an agreement is terminated then the other agreements will also be automatically terminated, in order to prevent that the agreements’ duration and the variety of their termination date prevent the retailer to recover his independence or to move to another network.

However, lease agreements, association agreements as well as civil, commercial and cooperative company agreements are exempted from this obligation.

The ambiguous wording of such article will certainly generate long debates and many court decisions in order to find its exact outlines. It will in particular and definitely be the case for the cumulative condition of an operating agreement containing a clause likely to limit the freedom to operate.

It should be noted that the law does not provide for any sanctions for the breach of Article L. 341-1 provisions.

In addition, Article L. 341-2 of the French commercial code provides that any clause which, after the expiration or the termination of the agreements mentioned in Article L. 341-1, is made to « limit the freedom to operate » of the retailer is not enforceable.

Article L. 341-2.-I further provides that the non-enforceability principle mentioned above is not applicable to clauses that satisfy the four cumulative following conditions:

  • the clause must relate to goods and services competing with the ones object of the terminated agreements;
  • it is limited to sites and premises from which the retailer operated under the agreements;
  • it is essential to the protection of secret, specific and substantial knowledge transmitted pursuant to the agreements;
  • it does not last more than one year after the expiration or termination of one of the same agreements.

Article L. 341-2.-I of the French commercial code is compliant with Regulation EU n° 330/2010 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, and faithfully transposes the same criteria.

All these provisions shall enter into force after the expiry of a period of one year as from the publication of the law.

The Macron law does not mention whether those provisions are applicable to existing agreements or only to agreements entered into as from the date of effect of those provisions. We can expect some debates about this question in the coming months.


Framework of payment terms (amended Article L. 441-6 of the French commercial code)

Since now, the maximum terms for payment agreed between the parties were, upon parties’ option, 45 days “end of month” or 60 days from the date of issue of the invoice. Any breach of those terms is punished by an administrative fine of up to €75,000 for an individual and up to €375,000 for a legal entity.

In order to comply with the Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011, the Macron law amends the provisions of Article L. 441-6 of the French commercial code and provides that the payment terms agreed upon between the parties may not exceed 60 days as of the date of issue of the invoice. The Macron law provides that parties can agree to a derogatory maximum term of 45 days end of the month from the invoice date ”as long as such payment terms are expressly agreed in the contract” and “ are not obviously unfair to the creditor”.

In addition, the law confirms the derogatory payment term created for the sale of products or the provisions of services falling under sectors presenting “a particularly notable seasonable nature” (already authorized as a transitional measure for toys, sports equipment, watch and jewellery, leather and agro equipment materials sectors), provided that such payment terms are expressly agreed in a contract and provided they are not obviously unfair to the creditor. The sectors’ list shall be subject to a further decree.

Any breach of Article L. 441-6, is punished with an administrative fine of up to €75,000 for an individual, and up to €375,000 for a legal entity.



The creation of intercompany loan regime (amended Article L. 511-6 of the French monetary and financial code)

The Macron law creates a new exception to the banking monopoly about loans. As a principle, credit institutions and finance companies are sole allowed to grant loans on a regular basis and against payment. Any breach of this principle is punished by heavy sanctions

As a new exception to the above mentioned principle, article L.511-6 of the French monetary and financial code provides that companies are allowed to loan money to other companies with which they keep economic connections This new exception in Article L.511-6 is subject to the following strict conditions:

  • this exception is available only to stock companies and limited liability companies which accounts are certified by auditors,
  • this activity must be secondary to their core business,
  • the beneficiaries can only be middle and small companies or micro business “microenterprises” with which lenders have economic connections,
  • the loans cannot exceed two years,
  • the loans must be in a written form and must be approved by the board or the shareholders, as the case may be, pursuant to the “regulated agreement” procedure in company law,
  • the loans must be mentioned in the annual management report and will be subject to a certificate issued by the auditors.

The lender will not be able to assign its claims to securitization companies. Any assignment made in breach of this principle will be deemed null and void.

Further terms and conditions under which such loans can be granted will be defined by a decree yet to come.