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prohibitions under Article 4 of Law No. 4054 on Protection of
Competition (“Law no. 4054”) unless the particular agreement benefits
from a block exemption or an individual exemption. Article 5 of Law
no. 4054 reads as follows:
“All agreements between undertakings,
decisions by associations of undertakings and concerted practices
which have as their object or effect or possible effect the prevention,
restriction or distortion of competition within a product or service
market shall be unlawful and prohibited”
. Depending on the content of
the transferred know-how, the franchise agreements might fall within
the scope of application of “Communiqué No. 2002/2 on Block
Exemption for Vertical Agreements” or “Communiqué No. 2008/2 on
Block Exemption of Technology Transfer Agreements”. These two
communiqués introduce different and detailed conditions for block
exemption. In order to benefit from the block exemption under either
of the communiqués, the agreement must fulfill the conditions laid
down in the relevant communiqué and must be devoid of the restrictive
covenants set forth in such communiqué.
In addition to the above, franchise agreement may be subject to
some other rules and regulations under Turkish law with respect to the
business and operational side of the agreement depending on the type
of activities conducted by the parties. For example, there might be
some licensing and operation requirements for the franchisee.
Conclusion
A franchise agreement is a
sui generis
agreement under which a
franchisee participates in franchisor’s business model by obtaining
franchisor’s know-how, operational system and business model, the
right to use the trademarks and logos that the franchisor holds. Because
of their
sui generis
nature; franchise agreements are governed by the
general principles of contract law and provisions applicable to typical
agreements, which considered as having similar elements with them
such as sales agreements, mandate agreements and agency agreements.
In addition, despite the freedom of contract principle, franchise agree-
ments have a restricted nature due to competition rules. Therefore, for
a specific case, it is always recommendable to seek legal advice before
signing a particular agreement in order to achieve full legal conformity.
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