>[27.Dec.19] General New Brazilian Franchising Law is enacted
Source: Brazilian Federal Senate (Adapted)

On 26.Dec.2019, a new Franchising Legal Framework (Law No. 13.996 of 2019), which aims to modernize business and cover subjects that were not mentioned on the previous legislation. The Law will come into effect on 26.Mar.2020.

The new Law increases the detailing of the concept of business franchising. Among the new features, it is noted the establishment that there is no employment relationship between the franchisor and employees of the franchisee even during training period, the possibility of regulating franchising for state companies and non-profit organizations, and the specification of criteria for subletting of the business site to the franchisee.

One main theme of the Law is the Franchise disclosure document, which should specify the conditions for implementing business, indicate all services offered by the franchisor, and establish rules for territorial competition between units from franchisor and franchisee. The Franchise disclosure document should also provide the franchisee with more detailing of the technological innovations and the l ayout and the architectonical features of the units of the franchisees.