Key points
- Morocco has no specific franchise law: the contract is what protects you.
- Key clauses: term, territory, entry fee and royalties, training, supply, non-compete, transfer, exit.
- Beware of guaranteed revenue promises and pressure to sign quickly.
- Have the contract reviewed by a lawyer and meet at least two franchisees in the network.
The franchise contract sets your relationship with the brand for several years. It is the most important document in your project, and the one people often read too quickly, carried away by the desire to open. Here are the clauses to examine one by one.
This article gives general guidance. It does not replace the advice of a lawyer or legal adviser, whom we recommend you consult before signing anything.
A framework that rests on the contract
Morocco has no law specifically dedicated to franchising. Nor is there a legal pre-contractual disclosure obligation comparable to France's Loi Doubin. The relationship is therefore governed by general contract and commercial law, by industrial property rules for the brand, and by competition law.
The consequence is simple: what protects you is what is written in the contract. Hence the importance of reading it line by line.
Before the contract: the information to ask for
Since the law does not require a disclosure document, ask for one yourself. A serious brand will answer these questions without difficulty:
- How long has the company existed, and who runs it?
- How many outlets does the network have, and where?
- Is the brand registered with OMPIC?
- Can you meet franchisees currently in operation?
- What total investment should you plan for the target format?
The clauses to read closely
Term and renewal
The contract is concluded for a fixed term. Check that it is long enough to pay back your investment, and see what happens at expiry: automatic renewal or not, conditions, notice periods.
Territory
Does the contract grant you exclusivity over a territory? If so, how is it defined: a neighbourhood, a city, a radius around the premises? Can the brand open another outlet there, or sell there through other channels such as delivery?
Entry fee and royalties
- The amount of the entry fee, when it is paid and what it covers.
- How royalties are calculated: a percentage of revenue or a fixed amount, the calculation base, the frequency.
- Whether there is a contribution to network marketing.
Run the numbers on your forecast to see what these sums represent each month. See also the items of the opening budget.
Training and assistance
The contract should describe what the franchisor commits to do: length and place of the initial training, presence at opening, visits, tools provided, ongoing training. The more precise these commitments, the better.
Supply
In a café, product quality makes the brand. It is therefore normal for the brand to impose certain products or suppliers. Check which ones, at what price and delivery conditions, and what you remain free to buy elsewhere.
Respecting the concept
Fit-out, menu, recommended prices, uniforms, opening hours, marketing: the contract and the operations manual specify what you must apply. Ask how changes to the concept are decided and who bears the cost, for example in the case of a required refurbishment.
The brand
The contract gives you the right to use the brand for its duration. Make sure it belongs to the franchisor and is protected in Morocco.
Non-compete
Two periods are concerned: during the contract, when you are usually asked not to run a competing business, and after the contract. Look at the length and scope of this second obligation: it determines what you can do with your premises and your experience once the contract ends.
Transfer
Can you sell your business or transfer the contract? The franchisor's consent is almost always required. Check the conditions and whether the brand has a right of first refusal.
Termination and exit
- In which cases can each party end the contract before its term?
- With what notice and what financial consequences?
- What happens to the signage, branded furniture and stock at the end of the contract?
Disputes
The contract specifies the applicable law and how a disagreement is settled: competent court, mediation or arbitration.
Warning signs
- You are pushed to sign "before the end of the week".
- You are refused contact with franchisees.
- You are promised guaranteed revenue or profit.
- The brand's commitments fit in two lines, yours in twenty pages.
- Answers to your questions stay verbal and are never confirmed in writing.
The right method
- Ask for the draft contract and take the time to read it at home.
- Write down all your questions and send them in writing.
- Have the contract reviewed by a lawyer who knows franchising.
- Meet at least two franchisees in the network.
- Only sign once every answer is in black and white.
A franchisor who believes in its concept encourages this approach: it has every interest in recruiting partners who commit with full knowledge. To place the contract within the whole process, see our complete guide to opening a coffee franchise.
Frequently asked questions
Is there a franchise law in Morocco?
No, there is no specific franchise law. The contract is governed by general contract and commercial law, which makes how it is drafted all the more important.
How long does a franchise contract last?
The parties set it freely and it varies between brands. It should be consistent with the time needed to pay back your investment.
Can you negotiate a franchise contract?
The core of the contract is the same for all franchisees in a network, which guarantees equal treatment among them. Some points linked to your situation, such as the territory or the opening schedule, can be discussed.