With effect from 17 May 2006, some additional disclosure requirements will become mandatory in Spain. The new law is the successor of the old Franchise Regime which created a Register of Franchisors and a disclosure rule. From 17 May 2006 all franchisors active on the Spanish market will have to meet the new requirements.

Generally, the new regulation is based on its predecessor. For the most part it repeats provisions of the previous Royal Decree on Franchising improving it by additional disclosure requirements. From now on:

●	each franchisor will have to disclose for how long he has been running the franchise business prior to disclosure
●	master franchisees will be obliged to annex to their disclose document a copy of their Master Franchise Agreement
●	foreign companies will have to translate all legal documents into Spanish and register them together with the original versions.

Further, each franchisor will have the right to voluntarily register the following information:

●	the company's quality certifications
●	any mediation or ADR systems in use in the franchise network
●	whether the franchisor observes the Code of Conduct
●	whether the franchisor participates in the consumers' arbitration system or any other system to settle consumer complaints

What action do franchisors need to take?

From 17 May 2006 all Spanish disclosure documents will need to be updated to comply with the new rules. For further information please contact Babette Märzheuser-Wood or Mark Abell.