In Special Appeal No. 1,602,076/SP, the Third Panel of the Brazilian Superior Court of Justice (STJ) held an arbitration clause in a franchise agreement to be null and void, based on Article 4 of the Brazilian Arbitration Act (Law No. 9,307/1996). The prevailing reasoning relied on the premise that franchise agreements are, by nature, standard-form (adhesion) contracts.
The topic is particularly relevant because STJ rulings often guide future decisions and may directly affect contracting practices in the franchising sector. Automatically classifying franchise agreements as standard-form contracts, however, raises concerns from the standpoint of legal certainty and the overall balance of the franchising system.
The article argues that the standardization typically found in franchise agreements does not necessarily amount to unilateral imposition of terms — a key element in the characterization of standard-form contracts. In franchising, contractual uniformity is usually connected to preserving the business model, safeguarding brand integrity, and ensuring parity among franchisees, without excluding, in many cases, room for negotiation on non-core provisions.
In addition, the legal framework governing franchising presupposes a structured pre-contractual phase, including extensive disclosure duties and minimum timeframes for review, which reinforces the commercial nature of the relationship and cautions against broad generalizations. In this context, the assessment should be case-specific, based on the evidence and the characteristics of the parties involved.
Finally, the text warns that broadly presuming franchise agreements to be standard-form contracts may go beyond arbitration clauses and open the door to challenges against other provisions that are essential to franchise operations, potentially destabilizing the franchising market.
Read the full article here!