The document is presented as a practical set of provisions for the governance of the relations between a franchisor and each of its franchisees. As stated in the preamble, the overarching principles of ethics that underline this set of provisions are good faith and fair dealings, which translate as franchisor-franchisee relations based on fairness, transparency and loyalty each of which contribute to founding confidence in the relationship. The Code is binding for all European Franchise Federation’s (EFF) Members as well as their respective memberships. However, it also serves as guidelines for the actors across the franchise industry, independently of their membership to national franchise associations or not. It also serves as guidance to legislators, the judiciary, other professional organisations as a standard.
The national franchise associations that are members of the EFF have the right and freedom to adopt for their country additional extensions to the Code to fit the evolution of franchising in their market. These extensions may not contradict the Code.
Originally written in 1972 by members of the EFF founding associations, the Code was reviewed in 1992 and updated in 2016. Its review process is based on 2 sources: (i) adapting to the needs of the actors of a naturally evolving industry and (ii) integrating into the European Code those national extensions which are deemed of relevance and applicability to the franchise industry across Europe. The European Code of Ethics for Franchising is a living Code which integrates grass-roots evolutions.
It covers the definition of franchising; guiding principles; recruitment, advertising and disclosure; selection of franchisees; the franchise agreement; and the relation with the master-franchise systems.