Franchise Agreements in Malta

Franchise businesses have developed quite a lot during the last years in Malta. If until recently most of the franchise agreements signed by Maltese companies were with international brands, the last couple of years have brought an increase in the number of local brands expanding their operations through franchises.

Even if no legislation is in place, franchise agreements fall under the Civil Law, the Commercial Law and the intellectual property legislation, due the responsibilities of the parties involved in the contract: the franchiser and the franchisee.

Our Maltese lawyers can offer more information on setting up franchises in this country.

Types of franchise agreements in Malta

As seen above, the franchise businesses have developed quite a lot in the last period of time which led to developments in the legal area of franchise contracts. Due to the high demand, franchisors have started to offer various options for those interested in purchasing their franchises. Among these, the most frequent are:

• -          the single-unit franchise agreement which allows a franchisee to open a single facility;
• -          the multi-unit franchise contract which allows the opening of several facilities;
• -          the area development franchise agreement which allows a franchisee to open several facilities in a certain region;
• -          the master franchise agreement which enables the franchisee to open and sell the right to the franchise themselves.

Maltese franchise agreements can also be divided according to the purpose of the franchisor who can allow a franchisee to distribute goods or services on their behalf or to use their license for producing goods.

Rights and obligations attached to franchise agreements in Malta

A franchise is set up by signing a franchise agreement between the parties. The franchise contract will enable a Maltese company to carry out certain activities under a renowned brand with the condition to pay the royalties to the franchisor and to protect the trademark. The franchisor is required to ensure the franchisee has access to the procedures employed by their company and, where possible, to provide the franchisee with specific training.

For assistance in drafting franchise agreements, do not hesitate to contact our law firm in Malta.