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The portfolio compensation herein is, a goodwill compensation for the
benefits derived by the franchisor from the clientele formerly intro-
duced by the franchisee, after termination.
Applicable Rules
As indicated above, there is no particular law that directly regu-
lates franchise agreements in Turkey. As a
sui generis
agreement,
franchise agreement is mainly subject to the general principles and
rules of contracts law as well as the contract law rules, which are
applicable to certain kind of agreements that have similarities with the
franchise agreements. Turkish scholars believe that certain provisions
of the TCC regulating agency agreements should be applied both to
distribution and franchise agreements since there are similarities
between these three types of agreements such as:
- continuous relationship between the parties,
- grant of right (either exclusive or non-exclusive) to sell products
in a defined territory,
- obligations to protect principles’ commercial interests and pro-
mote business in the defined territory.
Apart from the above similarities, franchise agreements could dif-
fer from agency agreements with the use of know-how, operation sys-
tem and trademarks.
In addition, a franchise agreement might, in particular, concern
other rules and regulations such as Turkish competition and intellectu-
al property laws.
As indicated above, one of the main features of the franchise
agreements is the use of intellectual property rights and transfer of
know-how. So that, the franchise agreements may well be subject to
the Turkish intellectual property rights in the sense of licensing
requirement, registration, infringement, etc.
As to the competition laws, a franchise agreement sets forth a ver-
tical relationship between the franchisor and the franchisee. They
mostly contain vertical restraints such as exclusivity, non-compete or
information exchange provisions. To that end, they would be subject to
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