9.2 Are there any local regulations that prescribe a minimum notice period that must be given to terminate a business relationship that has existed for several years, regardless of the length of the notice period specified in the franchise agreement? The contracting parties are authorized to determine all the rules for the operation and execution of the transaction that is the subject of the franchise agreement, provided that there is no legal obstacle. Therefore, given that BFL is silent on this issue, it is possible that the parties will privately determine how they will regulate the diversion of purchases from the online market. However, in order to protect the rights of both the franchisor and the franchisee, it is recommended that such a sale be obvious and well described in the franchise offer circular. In Brazil, the principles of free competition and preservation of economic order apply; Therefore, the rules imposed by those laws are essentially punitive in nature, since their main objective is to ensure the effectiveness of those principles. In this context, the Brazilian antitrust law, through a provision inserted in Article 36, establishes certain situations that are considered violations of the economic order, which can be sanctioned by the application of a sanction against companies and their managers if they are found guilty of violating the economic order. in accordance with the law. No, there is no legal requirement for a maximum duration in product supply contracts. 7.2 Is the concept of conditional lease option/assignment via lease (whereby a franchisor has the right to follow in the franchisee`s footsteps under the lease or directly that a third party (often a surrogate franchisee) can do so after the default of the original lessee or termination of the franchise agreement) understood and enforceable? Article 7 of the BFL stipulates that international franchise agreements must originally be drawn up in Portuguese. If this is not the case, the law requires a certified translation into Portuguese at the franchisor`s expense, so that the contracting parties can choose in the contract the jurisdiction of one of their countries of residence.
On the other hand, in accordance with the provisions of Article No. 2 of the BFL, the franchise offer circular (the Brazilian information document) can only be drawn up in Portuguese. 8.1 If an online order for products or a request for services is received from a potential customer outside the franchisee`s exclusive territory, can the franchise agreement impose a binding requirement that the request be forwarded to the franchisee for the territory from which the sales request originates? 4.3 Is copyright (in the operations manual or proprietary software developed by the franchisor and licensed to the franchisee under the franchise agreement) protected by local law? Good faith has the status of a legal principle in the Brazilian judicial system. This implies that its observance is mandatory, regardless of the interactions between individuals in this area. The principle of good faith is one of the pillars of Brazilian civil law and applies objectively to contractual relations, even after their termination. The principle of good faith is set forth in Article No. 422 of the Brazilian Civil Code, which states: «The contracting parties are bound to respect the principles of honesty and good faith both in the conclusion of the contract and in its execution.» The principle of loyalty, which is more applicable in contractual relations, consists essentially in the duty of the parties to behave ethically, fairly and honestly. In this context, any contractual relationship (including franchise agreements) must necessarily respect the principle of good faith and must not allow any other requirement that prevails over this principle. Adequate legal assistance, especially in the stages of drafting the franchise offer circular, is able to ensure the long-term health and stability of both parties, avoid financial losses and, consequently, generate higher revenues for both parties involved. There is no legal provision regarding the duration of a franchise agreement and a contract can therefore be concluded for an indefinite period. However, in the case of international franchise companies, it is also necessary to register the contract with the Brazilian Trademark and Patent Office in order to allow the transfer of royalties abroad, having a defined duration.