Franchise Agreements in Denmark
Franchise Agreements in DenmarkUpdated on Monday 17th April 2023
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Foreign investors who want to enter the Danish market can choose the direct franchising method. This is a simple form of franchising and it has the capability to yield revenue and advantages for both the franchisor and the franchisee.
There are several franchising options available and investors who want to pursue this business model will conclude franchise agreements in Denmark based on the characteristics of the business field, the type of franchise license and other market-specific characteristics.
Our team of lawyers in Denmark can help you conclude this type of agreement and start your business in the country.
Franchising in Denmark
The franchisor is the individual or company that grants the licensing and manufacturing rights to a third party, the franchisee. Following the agreement between the two parties, the latter will hold the franchise and will be able to use it to sell goods or to provide services in Denmark.
Direct franchising is the most commonly used franchising method in the country. Under this simple method, the franchisor grants the franchisee the license to perform at one business location, within a pre-specified area. This condition for pre-specified areas applies mostly in the case of fast-food chains. The franchisee may open additional locations, based on the performance of the first franchise and as agreed with the license owner.
Our Danish lawyers can give you more details on regional franchising, master franchising and area development agreements, which are franchising agreements used for larger areas.
Danish franchising agreements
When opening a Danish franchise, it is important to understand all of the applicable laws and regulations for the particular business field in which the franchise will operate. The franchisor and the franchisee will also need to sign a comprehensive franchising agreement in Denmark, which outlines the terms for opening one or more franchise, future expansion, and trademark usage rights.
Franchising agreements in Denmark are governed by the Contract Law. They may be concluded with freedom of form and language, however, they must observe the provisions of the Product Liability Act, the Competition Act and other related rules and regulations.
Our lawyers Denmark can help you consider all of the intellectual property regulations concerning franchising, especially the ones applicable in the country.
For investors concerned with the taxation of the franchise, our team can answer the most commonly asked questions and our accountants in Denmark can provide the needed accounting compliance solutions, starting with preparing and filing the annual financial statements in accordance with the used accounting principles (IAS/IFRS/Danish GAAP). You can reach out to us for more information.
The experts at our law firm in Denmark can answer any additional questions about franchising in the country and can help you explore different options for establishing a business in the country.
Contact us for more information on how we can assist you.