Franchising in turkey
With it’s large domestic market and it’s promising economy, Turkey is without doubts an interesting country for international franchise growht. Turkey’s franchise market generated in 2014 $ 43 billion, and it’s expected to grow up to $ 50 billion in 2015 creating even more opportunities.
In general, a franchise agreement consists of two parties, juridically and economically independent between them, where one (the franchisor) inserts the other (the franchisee) in his own distribution chain. On one hand the francesee can use a set of distinctive marks and marketing methods and benefit of the support of the franchisor during it’s business activity, on the other the franchisor receives a franchisee fee and royalty, and support to the sale of his products or services.
According to Turkish law, the franchise agreement is a type of contract that contains the characteristics of various other typical agreements (sale, agency, office). Given the absence of specific legislation on franchising, the provisions of the Turkish Code of Obligations and of the turkish Commercial Code regarding the aforesaid contractual figures is applicable. In addition, a franchise agreement might, in particular, concern other rules and regulations such as Turkish competition and intellectual property laws.
A key feature of franchise agreements is the use of intellectual property rights and the transfer of know-how; because of the absence of a specific law on franchising, the existing rules of turkish laws regarding intellectual property rights, licensing, registration, etc. will applicable.
Different causes of termination are provided. The franchise agreement can be drafted for a definite term, after which will follow the termination of the contract. In case of an agreement drafted for an indefinite term, termination may occur either:
– one party may declare termination of the contract by giving a ‘reasonable notice period’. Generally a three months of prior notice to the other party is recognized as reasonable.
– in case a just cause occurres ın case a party terminates the agreement without just cause, a compensation for the damages may be obtained.