What is a concession? It is customary to mean the transfer of deposits for the extraction of natural resources or enterprises for rent. In Russia, a commercial concession is a purchase of an idea and business technology.
Concession is the essence of relationships
At the heart of any business is an idea in the development of which money is invested. It is not necessary to invent something yourself; it is enough to take a promoted brand and make a profit on its basis. What is a concession? The definition is contained in the Civil Code, Art. 1027. According to it, one side provides a set of exclusive rights, the second undertakes to pay and comply with the conditions for their use. More familiar is the term franchising.
Concession agreement - what is it in terms of terms? The parties have the right not to limit the duration of the agreement, but this almost never happens. The agreement is between commercial organizations or entrepreneurs.
A common example is McDonald's. The company transfers technology, assists in the development of business to other entrepreneurs or organizations. In return, she receives a steady income. This is what a commercial concession looks like. What is it for domestic entrepreneurs? In Russia, many companies or businessmen who have organized their business now use franchising, and this system has proven to be quite viable. And what is a concession of facilities? This is the transfer of state or municipal property to entrepreneurs for temporary use by agreement. It is completely different from the commercial concession in essence.
Franchising Forms
In practice, several types of concessions have been developed: sales, trade, in the service sector, and production. Sales franchising is created to expand the network for the distribution of their goods. Shopping represents the opening of new stores under the same brand. Similarly, in the service sector. The production form is the most complex, because involves the opening of an entire enterprise.
Concession is a profitable event, because the brand owner can receive additional income without opening new branches, enterprises, etc. All this is done for him by other persons, at the same time, additional sources of income appear. Rights purchasers have their own benefits - a ready-made recipe for a business with assistance in various aspects. Of course, you have to adhere to the strict framework of doing business, but this is a perfectly feasible requirement.
Before the opening of the enterprise, a study is carried out and it becomes clear whether the goods or services will be popular in a particular area, if it is a serious brand. However, business giants act this way; small companies are not so serious in this matter.
Exclusive rights as a subject of a contract
So, what is a concession is now clear. But what are exclusive rights? Exclusive rights are understood to mean the ability to use a trademark, other brand attributes, production technology or services. Assistance is provided in organizing a business, consultations are periodically conducted, and staff training is provided.
The payment system is determined by the parties. It can be fixed. It includes a fee for additional services, or payment is made for each of them separately. The boundaries of the use of rights are clearly defined by the contract. In particular, it is forbidden to make the slightest changes to the technology, attributes, even if it is detrimental. Of course, this is not about committing offenses. This is a short answer to the question of what a concession is.
Rights and obligations of the copyright holder
The law contains a general list of duties and rights. In each case, they find their specific expression:
- transfer of technical and other documentation for doing business;
- advice on issues arising in the course of business;
- licensing according to the terms of the contract;
- quality control of products or services.
What rights does the franchise owner have? The main right is to receive payment for the services provided. An equally serious condition is the preservation of trade secrets.
Responsibilities and User Rights
Responsibilities:
- use the company name or commercial designation according to the contract, in particular, fully comply with the design of premises, uniforms of employees, etc .;
- the level of quality of the goods or services provided should not be less than that of the copyright holder;
- production of the same volume of services and goods as the copyright holder;
- keep trade secrets, confidential information;
- inform consumers that the activity is based on a concession.
The right to help is expressed in organizing the supply of raw materials and equipment. The recipient pays for them directly. How and to what extent they are provided is determined by the terms of the agreement.
In addition, the user has the right to extend the contract if working with him does not cause complaints from the copyright holder. Refusal to renew entails a ban for the copyright holder to conclude a similar agreement in the same locality with another person. The restriction is valid for 3 years. You can get around the limitation. It is only necessary to pay the agreed amount to the former user. If the concession agreement is extended, then the position of the user cannot be worsened.
How is the agreement
How to make a concession agreement valid? If the copyright holder is a foreign organization or a foreign citizen, it is mandatory for him to obtain permission to conduct business. This is done by the Federal Tax Service. The document is prepared in writing and registered with Rospatent.
Concession agreement - what is it, in the opinion of the department? This is a text on paper with signatures and details of the parties. The agreement sheets are numbered and stitched. The content is checked for compliance with the law, if deficiencies are identified, documents are sent to the applicant for correction. Violation of the written form leads to the nullity of the agreement, its illegality. Lack of registration provides for other consequences - the contract is considered to be non-concluded. No one has any rights or obligations in connection with this.
Passing the procedure can be a difficult step, so it is advisable to attract an experienced lawyer in the field of intellectual law. Neglect of formalities will not allow any of the parties to protect their rights in the future.