The franchising agreement is widespread in Algeria and is included in the category of business contracts, together with agency and distribution agreements. The franchising agreement connects a franchisee and a franchisor. The franchisor grants the franchisee the right to use and disseminate its brand and label for commercial purposes as well as the right to produce its products and market them. In return, the franchisee undertakes to pay a sum calculated on his turnover and be bound by a number of obligations of the franchisor for which he will comply with the manufacturing standards of the franchisor's product, at the rates charged, to produce the products that the franchisor will choose to put on the market and follow the rules related to the preparation of the commercial premise. The franchise agreement is not subject to specific legislation. The parties to the contract have ample room for maneuver to draft the clauses according to their convenience and organize their relations according to their needs. The rules generally common to franchise agreements concern: the remuneration due to the franchisor who accepts that his brand is disseminated by a third party; the list of obligations including that the trademark is disseminated according to the will and rules of the franchisor. Franchisor’s initiatives include the marketing of new products that the franchisee cannot refuse and the advertising of the brand. Sometimes, for the purchase of raw materials, there is the further obligation on the franchisee to procure from the franchisor.
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