Are there any necessary formalities (written, protocolization, registration, etc.) for the validity of a Franchise Contract? If affirmative, what are the consequences of the inobservance of the mentioned formalities?

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Given that no legal regulation regarding this matter exists, it is important to consider that one of the essential elements of this agreement is the existence of a Trademark License. Being this so, the law demands that this kind of agreement must be in writing and therefore such applies to the Franchise Agreement. Therefore, it will also be necessary for the Franchise Contract to be written to be valid.

As to the registration of the License Agreement, our legislation demands the contract to be registered before the Superintendence of Industry and Commerce, to avoid third parties’ opposition. This registration is not compelling for the execution of the Agreement among the parties but it is very practical to carry out to demonstrate the use of the Trademarks and due to its importance as proof to defend the Trademarks against the potential cancellation actions for non-use.

Likewise, the written document is necessary due to the need of filing the same before the National Tax Authority (DIAN), when the Franchisor is a foreigner and the Franchisee a Colombian, considering that the payments must be send abroad.