On December 27, President Jair Bolsonaro signed the new Franchise Law. One of the main changes is to make it clear that the relationship between franchisee and franchisor is not one of consumption, but a business relationship. The new law invalidates the previous rules that had been in force since 1994.

One of the articles vetoed by the president allowed state-owned companies to franchise their services to private individuals without bidding, violating the State-Owned Companies Law, which obliges public companies to tender their buying and selling processes.

For Raphael Zaroni, “the new law expands the concept of business franchise and details its objective, which results in an improvement of private relations in a more transparent way and gives greater legal certainty to the commercial relationship.”

The new Franchise Law shows that there is no employment relationship between franchisors and franchisees or in relation to employees of franchisees, a decision adapted from the already recurring jurisprudence of the Superior Court of Justice.