Field Fisher Waterhouse

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Spain: Beware the New Red Tape - Annual Reporting Requirements

July 2006

Field Fisher Waterhouse LLP

35 Vine Street
London
EC3N 2AA

Tel: +44 (0)20 7861 4000
Fax: +44 (0)20 7488 0084

www.ffw.com

European Franchising Network

EuropeanFranchising.com is an online information resource service for businesses considering using franchising as a way of developing their market in Europe.

Europeanfranchising.com offers a seamless one stop online service for all franchising matters within all EU Member States. It aims to save franchisors time, money and aggravation by making available to them relevant commercial and legal information on franchising in the EU. It is operated by Field Fisher Waterhouse LLP, the EU's leading franchise lawyers. It is edited by Mark Abell, Chairman of the European Franchising Network ("EfN"), who is recognised by Chambers and Partners Guide to the legal profession as the No1 legal adviser for the franchising sector.

Comments

A new Spanish statute imposes on franchisors looking to grant franchise rights in Spain, additional procedural and administrative requirements.

Franchisors looking to enter the Spanish market are now obliged to comply with:

1. annual reporting and filing obligations; and

2. additional disclosure requirements

The additional disclosure obligations were the subject of a previous FFW newsflash.

More Red Tape

One of the main requirements the statute imposes on franchisors is an obligation to notify the Spanish Registry of:

· changes to the franchisor's registered office; and

· closing or opening of franchised establishments.

Annual Report Filing

The annual report is required to update the Spanish Registry on the current situation (including the information above) of the franchise network.

Even if no changes have taken place, a franchisor has to file an annual report stating that no changes have occurred.

Continuous failure to comply with these new filing obligations could ultimately lead to the franchisor being struck-off at the Spanish Registry with further, more serious implications resulting therefrom.

What action do franchisors need to take?

We are happy to provide you with detailed advice on the requirements for compliance with the Spanish franchise legislation, including the annual filing obligations.

If you require any further information, please contact Babette Marzheuser-Wood or Mark Abell.

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