#Distribution Agreement Lawyer in France

A distribution agreement structures how a business brings its products and services to market. Exclusive or selective distribution, dealership (concession), franchise or supply: each model serves a commercial strategy, but all face the same requirements of competition law and the French rules on restrictive practices. We assist network heads and distributors in designing, performing and ending these relationships.

Choosing the right distribution model under French law

Exclusive distribution reserves a territory or a customer group to one distributor; selective distribution chooses resellers on objective, often qualitative, criteria; dealership and franchise add the transfer of know-how and distinctive signs. The choice determines whether exclusivity, non-compete and quota clauses are valid, as assessed under the law on anti-competitive agreements.

Regulation (EU) 2022/720 on vertical restraints exempts many clauses where each party’s market share does not exceed 30% and non-compete obligations do not exceed five years. Beyond that, or where hardcore restrictions are present, the clause must be assessed individually.

Hardcore restrictions to avoid

Some practices are under particular scrutiny: imposing a minimum resale price, a general ban on online sales, or absolute territorial protection. They cause the loss of the exemption and create a risk of a prohibited anti-competitive agreement. The drafting must preserve the distributor’s commercial freedom where the law requires it, while protecting the image and consistency of the network.

Putting the commercial relationship in writing

Between suppliers and distributors, Article L441-3 of the French Commercial Code (Code de commerce) requires a written agreement setting out “the reciprocal obligations to which the parties have committed at the end of the commercial negotiation”, concluded for one, two or three years. A vague agreement exposes the parties to a sanctionable significant imbalance and to disputes over the actual content of the commitments.

Termination: the main risk

Ending a distribution relationship is lawful, but ending it abruptly is not. Article L442-1, II, of the Commercial Code makes liable anyone who abruptly terminates, “even partially, an established commercial relationship, in the absence of written notice” that takes into account, in particular, the length of the relationship. The law provides a safe harbour of eighteen months’ notice, beyond which no liability can arise on the ground that the notice was too short. A sudden delisting without notice exposes its author to a claim for damages.

Who we act for

We advise network heads (manufacturers, brands, franchisors) as well as distributors, dealers and franchisees. Their interests often conflict: the network head wants consistency, image and control of its network coverage; the distributor wants its investment protected and a fair exit. Our role is to set out these tensions objectively in a clear contract that complies with competition law, and to manage them without abrupt termination when the time comes.

Franchise, dealership or agency: choosing the right framework

Choosing the model is not just a matter of wording. A franchise relies on the transfer of proven know-how, distinctive signs and ongoing assistance; it requires rigorous pre-contractual disclosure. A dealership organises exclusive resale in a territory. An agency mandate, for its part, brings the relationship under the protective status of the commercial agent. A wrongly characterised structure exposes the parties to recharacterisation and to unanticipated indemnities.

Key points to watch

• Never impose a minimum or fixed resale price: it is a hardcore restriction.
• Set rules for online sales and marketplaces without banning them entirely.
• Check the duration of non-compete obligations (five years maximum for the exemption).
• Document how long the relationship has lasted: this determines the length of the termination notice.
• Conclude the written agreement (for one, two or three years) by 1 March at the latest and renew it when it expires.

How we work

• Audit and design of networks (exclusive, selective, franchise, dealership).
• Drafting of framework agreements, general terms and conditions and single agreements (conventions uniques).
• Making clauses legally sound under competition law (EU and French).
• Handling terminations and notice periods, and litigation over abrupt termination.
• Litigation over restrictive practices and significant imbalance.

How is the termination notice period calculated?

The length of notice is not a fixed amount: it is assessed case by case. The courts take into account the length of the relationship, the volume of business, the economic dependence of the excluded partner, the specific investments made and the difficulty of finding an equivalent outlet. The longer-standing and more significant the relationship, the longer the expected notice. The law sets a safe-harbour benchmark: eighteen months’ notice protects the terminating party from the complaint that the notice was too short.

Where the notice is insufficient, the loss compensated is in principle the margin the partner would have earned during the notice period that should have been observed. Other losses may be added: restructuring costs, redundancies made necessary, stock that can no longer be sold. Anticipating this calculation allows the terminating party to set a defensible notice period, and the excluded partner to quantify its claim on a sound basis.

Frequently asked questions

Can a supplier impose a resale price on its distributors?

No, not a minimum or fixed price: that is a hardcore restriction. Only maximum or recommended prices, which leave the distributor free, are in principle allowed.

How much notice is required before ending a distribution relationship?

Written notice proportionate to the length of the relationship and the circumstances. Eighteen months’ notice protects against the complaint that the notice was too short (Article L442-1, II).

Checklist before signing or terminating

• Identify the actual model (exclusive, selective, franchise, dealership, agency) and its competition-law constraints.
• Check market shares and the duration of exclusivity obligations against Regulation (EU) 2022/720.
• Rule out any imposition of a minimum or fixed resale price.
• Conclude and update the written agreement within the statutory deadlines.
• Before any termination, reconstruct the history of the relationship and set a proportionate written notice period.
• Record every major decision in writing, with a prior formal notice where necessary.

Official sources

• Article L442-1 of the French Commercial Code, abrupt termination of commercial relationships: Légifrance (in French)
• Article L441-3 of the French Commercial Code, written agreement: Légifrance (in French)
• Regulation (EU) 2022/720 on vertical restraints: EUR-Lex

Every situation is different and we make no promise of outcome. To design, protect or unwind a distribution network, our lawyers in distribution and competition law assist you.