Changes In Franchise Law

On December 26, 2019, Law No. 13,966/2019 (known as the "Franchise Law") was published. The Franchise Law establishes the main provisions and requirements applicable to the business franchise system. Below are the main changes promoted by the Franchise Law:

1. Article 1 of the Franchise Law makes clear the non-applicability of the consumer and the labor legislations to relations between franchisees (and their employees) and franchisors.
    
2. The Franchise Law regulates the public franchise (state or mixed-economy entities that adopt the system to expand their operations), that did not expressly exist in the prior system.
    
3. In relation to the Offering Circular ("COF"), new items have been added as mandatory inclusion items in the document, among which, the following: (a) the term for listing franchisees that are no longer part of the network has increased from 12 to 24 months; (b) in relation to the territory, specification on the existence of potential