Which is the difference between a Franchise Agreement and a Distribution Agreement?

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The difference relies on identifying the essential elements of each specific agreement.

The essential element of a Distribution Agreement is the selling of certain manufactured or imported goods by the director or agent, for these to be resold by the distributor under the conditions agreed in the contract. For this purpose, the distributor does not need a Trademark License from the director or the manufacturer.

On the other hand, the essential elements of a Franchise Agreement are the granting of a Trademark License of the Franchiser and the knowledge transfer and based on these, additionally there can be some other ancillary obligations when the parties agree on them. For example, under certain circumstances the parties can establish that the Franchiser is compelled to buy products from the Franchisee for its resale.

If there is a Selling Agreement and no Trademark License or Transfer of Technical Knowledge, such arrangement can be interpreted as a Distribution Contract based on the obligations that the buyer assumes.