The so called “Competition Law”, law no. 21/1996, through it’s article 5, prohibits vertical agreements that significantly restrict or distort competition. Franchise agreements refer to the licensing of intellectual property rights related to trade marks, trade signs or communication of know-how, for the purpose of using and distributing the goods or services. Apart from offering the work method, the usual franchise agreements contain combinations of vertical restrictions, especially the selective distribution and/or the non-compete obligation or exclusive distribution, or slightly attenuated forms of the same.
As the transfer of know-how is more significant, vertical restrictions are increasingly prone to becoming subject to exemption. As far as the non-compete obligation is concerned for the goods or services purchased by the beneficiary, this obligation is subject to exemption to the extent that it is necessary to maintain the joint identity and the reputation of the franchised network.
