Practical note · Mehdi El Jamali · Paris Bar lawyer
This note focuses on distribution agreements and the European framework where applicable. Assessment depends on markets and proposed restrictions. Other applicable laws require coordination with local counsel.
The partner promises to invest in your brand, recruit a team and open new channels. In return, it requests exclusivity. The question is which opportunities your company will reserve for that partner, and for what concrete project.
Define precisely what you reserve
Specify products, territory, customer groups and channels. Will your team continue serving key accounts? What place remains for your online store? Address these questions before treating “exclusivity” as an agreement in principle.
Reserving a territory does not permit every sale into it to be prohibited. European rules distinguish active sales targeting a territory or customers from passive sales responding to unsolicited requests. Permitted restrictions vary by network and applicable exceptions. Before promising territorial protection, check what you can actually arrange.
Make the partner’s commitment measurable
Go beyond a promise of growth: discuss planned investment, allocated resources and reporting. Which results will trigger a review? How long does the partner reasonably need to implement its plan?
Compare sales targets with the resources promised and your own supply commitments. Work with commercial and operational teams to identify indicators that support a discussion based on facts.
Plan the duration and review points
A launch phase and an established relationship raise different questions. Arrange review points and examine how the scope or relationship may change if results fall short. Do not assume a clause always permits immediate termination.
Distinguish the commitments. Promising not to appoint another distributor in an area differs from requiring that distributor to stop selling competing brands. The latter follows specific rules. Five years relates to certain exemption conditions for non-compete obligations; it is not a general maximum for all exclusivity. Exceptions exist, and some renewals remain possible if the distributor can effectively renegotiate or exit on reasonable terms. Examine the clause, duration and actual exit conditions together.
Prepare your decision
Before negotiating, define what you expect from the partner and which development opportunities you want to retain. Legal analysis can then address the actual arrangements, markets and reciprocal commitments.
Check French requirements too
The timetable may start before signing. Where a trademark, trade name or sign is made available to a partner subject to exclusivity or quasi-exclusivity for its activity, check whether the pre-contractual disclosure framework applies to the agreement made in both parties’ common interest. If it does, the disclosure document and draft agreement must be provided at least twenty days before signing or, where applicable, the relevant advance payment. Not every exclusivity arrangement triggers this obligation.
Duration must also be assessed under French law. Certain clauses requiring a purchaser, transferee or lessee of movable goods not to use similar or complementary goods from another supplier are limited to ten years. This rule has a specific scope; it is not a maximum duration for every commercial exclusivity arrangement.