The franchise sector has been a steady performer over the past several years. Spanish franchisors account for 83 percent of the systems; the remaining 17 percent are from the United States, France, Italy, Portugal and the UK.
Statistics vary due to the difference in criteria used by main trade sources. The number of franchise systems is estimated at 830 – 900 with 51,500 - 63,000 outlets, and sales averaging Euros 16 billion (USD 22 billion).
Although Spain does not have specific legislation regulating franchising, Article 62 of the 1996 Retail Trade Act provides a definition as well as conditions for franchising in Spain. When drawing up contracts, franchisors should bear in mind that franchise companies - whether Spanish, foreign, or master franchisee – must be registered in a special administrative Franchisors Registry. They are also bound by the Disclosure of Pre- Contractual Information requirement.
All required information must be delivered in writing to the intended franchisee at least 20 days prior to signing a franchising contract or pre-contract or prior to any payment to the franchisor.
As of April 2003, Spanish legislation enacted EU regulations on franchising, distribution agreements and exclusive purchases. The purpose of the EU regulation is to guarantee competition practices in agency and distribution contracts. Some of the areas covered include term of contract, market share considerations, exclusivity rights, and mandatory volume of products. Companies are advised to have all new contracts drawn up in compliance with this new legislation, and to have current contracts reviewed whenever possible.