The East Europe Franchise Association - A Comprehensive resource for effective franchise business in East & Central Europe.

East and Central Europe Market Intelligence

Legal Country Overviews
These are legal overviews of key CEE countries.

Poland

The flag of Overview:
Franchising systems in Poland are among the most developed among Eastern European countries. Franchising systems in Poland function in many market segments, because many western European franchisors invested in Poland as soon as Poland joined the European Union in 2004 and even before. Nowadays Polish franchising systems operate in the pharmaceutical market, the household services market, the cosmetics market, textile and clothes markets, luxury goods markets, in real estate and others.

During recent years in Poland, the number of systems and franchising brands has been constantly growing. In 2008, the Polish franchise market grew by over four thousand franchise units. The numbers of first half of 2009 tend to confirm this growth trend, in spite of the economic downturn.

Nowadays there are over 300 franchising brands in Poland and more than 13,500 franchising outlets. Around 30% of the franchising systems in Poland come from foreign countries. Most foreign-based franchise systems come from Germany, France and the USA.

According to experts on the Polish franchising market, franchising schemes are the most popular in the following market segments: textiles, retail food sales, professional development services, body care salons (hairdressers’ services and beauty salons), fuel stations, financial services and fast food.

Since the Polish law does not contain a separate “Franchise Code” the majority of regulations applicable to franchise agreements are scattered in the Polish Civil Code, the Commercial Companies Codes, the Act on Abatement of Unfair Competition and many other laws.

Polish law does not defined the terms “franchise” or “franchising.” However, Polish case law has defined the characteristics of the franchise relationship. Under Polish law as informed by precedent, franchising is considered an agreement between commercial entities (franchisor and franchisee) under which the franchisor grants the franchisee the right to use trademarks or service marks and rights to use other intellectual property rights, in particular the right to use know-how for a certain period of time and for remuneration.

As Polish law does not specifically regulate franchising agreements, such agreements belong to the category of so-called “nameless contracts” governed by the general contract principles set forth in the Polish Civil Code.

Under Polish law, the parties signing a franchising agreement remain totally independent of each other. Both the outlet and the goods (which are frequently supplied by the franchisor) belong to the franchisee. The franchisee purchases goods and services on its own behalf and account: all sales revenue belongs to the franchisee.

In turn, the franchisee pays periodic franchise fees to the franchisor.

Unlike in other Eastern European jurisdictions, there are no disclosure obligations and no franchise-related registration requirement in Poland. However, under general principles of Polish civil law a franchisor has a precontractual duty to disclose key facts about the franchise system. Polish law does not restrict:

  • The term of a franchise
  • The amount of fees, royalties or other sums payable by the franchisee to the franchisor
  • The obligation of the franchisee to operate only the franchised business or to devote his or her working time exclusively to that business
  • Restrictions on the products or services sold by the franchisee
  • Territorial rights granted to the franchisee or
  • Quality and other standards of controls imposed by a franchisor on the franchisee.

It is also common for Poland to use a distribution agreement as an alternative to a franchise agreement. A distribution agreement grants the parties similar rights and protections to those in a franchising agreement. Numerous companies have successfully used distribution and licensing agreements to set up business networks in Poland.

Because Polish law allows broad freedom of contract, Polish law is quite liberal in allowing parties to draft franchising or similar agreements as they wish. Franchisors wishing to operate in Poland are often able to take advantage of this flexibility when drafting franchising agreements. As a result, a franchisor may sometimes simply transfer proven control- and risk management systems. into franchise agreements governed by Polish law.

Noerr is an international partnership of attorneys, tax advisors and auditors.
Arkadiusz Ruminski, LL.M.
tel +48 22 579 3095
Al. Armii Ludowej 26
PL-00-609 Warszawa
Poland

 

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