I. Agency, Distribution and Franchising – definitions
A. Article 710 of the Brazilian Civil Code defines agency where one assumes, on a habitual basis and with no subordination, the obligation of promoting, on account of another, upon a compensation, certain businesses, within a geographic area, being the distribution when the agent has possession of the goods to be traded. In other works, the distributor purchases the goods from the seller and resells them in a specific territory on its own account and risk.
B. Franchising is defined by Law 13.966 of December 26, 2019 (the “New Brazilian Franchise Law” or the “New Law”), as the system where the franchisor authorizes by means of a contract the franchisee to use trademarks and other IP rights, always associated to production or exclusive or nonexclusive distribution rights of products or services and use of methods and implementation and management of a business or operational system developed or owned by the franchisor, upon direct or indirect compensation, without characterizing a consumer or employment relationship in relation to the franchisee or its employees, even during training period.