VZCZCXRO3441
PP RUEHTRO
DE RUEHTU #1581/01 3511227
ZNR UUUUU ZZH
P 171227Z DEC 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 4218
INFO RUEHAS/AMEMBASSY ALGIERS PRIORITY 7576
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0928
RUEHFR/AMEMBASSY PARIS PRIORITY 1860
RUEHRB/AMEMBASSY RABAT PRIORITY 8464
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0161
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4157
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 001581 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG (MHARRIS) AND EB/CIP 
STATE PASS USTR (BURKHEAD) 
USDOC FOR ITA/MAC/ONE (MASON), ADVOCACY CTR (REITZE), AND 
CLDP (MCMANUS) 
CASABLANCA FOR FCS (ORTIZ) 
PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ETRD ECON TS
SUBJECT: GOT INTERESTED IN ASSISTANCE WITH SERVICES AND FRANCHISING 
LAW 
 
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SUMMARY 
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¶1. (SBU)  During a December 10 meeting, Ministry of Commerce 
Director of Domestic Trade Mohamed Laouini told EmbOffs that the GOT 
has drafted a revised services law.  The legislation will also 
address the regulation of franchises, which are currently limited in 
Tunisia.  Laouini shared the draft law and said he was open to USG 
technical assistance on franchise legislation.  Laouini also 
provided an overview of existing GOT regulations regarding 
franchising.  End Summary. 
 
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NEW SERVICES LAW 
---------------- 
 
¶2. (SBU)  EconCommOff and EconCommSpecialist met with Mohamed 
Laouini, Director of Domestic Trade at the Ministry of Commerce, on 
December 10 to discuss GOT interest in franchising reform.  Laouini 
indicated that the GOT is currently reviewing many old laws and 
regulations dating back to 1961.  He confirmed that the GOT is 
preparing new legislation regulating the services sector in 
accordance with President Ben Ali's program for domestic trade 
regulation.  He added that the ministry has already completed a 
preliminary draft of the new legislation and plans to have it in 
final form and approved through the legislative process for 
implementation before the end of 2009.  This legislation will also 
cover the important issue of commercial franchising in Tunisia, 
which is currently unregulated.  Laouini passed EmbOffs a copy of 
the draft services law, which includes several articles outlining 
the general terms of franchisor/franchisee relations. 
 
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Technical Assistance Opportunities 
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¶3. (SBU)  When asked if the USG could provide technical assistance 
with the franchise legislation, Laouini said that the major concern 
of the GOT is to develop a standard commercial contract template for 
franchises.  The GOT wants to be assured that any franchise contract 
will not favor the franchisor but instead will contain a balanced 
relationship between the franchisor and the franchisee and protect 
the rights of both in the case of a dispute or conflict.  Laouini 
said he hoped to review other countries' franchise legislation to 
see how this issue has been addressed elsewhere. 
 
¶4. (SBU) Laouini, who attended the US Department of Commerce's Cairo 
Franchising Conference in October 2007, said he is also interested 
in learning about the franchise experience of other countries. 
EmbOffs suggested that he consider attending the April 2008 
International Franchise Show in Washington D.C. where he could meet 
USG officials and US Franchise Association representatives.  EmbOffs 
also mentioned the January 2008 visit of Marianne McManus from the 
Department of Commerce's Commercial Law Development Program and said 
that CLDP may be able to provide technical assistance in the field 
of franchising.  Laouini was very interested in the International 
Franchise Show and was willing to meet with McManus.  He said that 
the GOT is open to any type of training or seminars in the area of 
franchising. 
 
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NO EXCLUSIVITY IN TUNISIA 
------------------------- 
 
¶5. (SBU)  Laouini said that Tunisian law currently prohibits all 
types of "exclusivity contracts" arguing that their prohibition 
increases competition within the domestic economy and gives the 
Tunisian consumer wider choices and lower prices.  Tunisian 
businesses can privately arrange bilateral exclusivity contracts 
with an international enterprise, but these contracts have no 
validity in Tunisian courts. 
 
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"INDUSTRIAL" FRANCHISES 
----------------------- 
 
TUNIS 00001581  002 OF 002 
 
 
 
¶6. (SBU)  According to Laouini, "industrial franchising" or local 
production and distribution of foreign products under license to 
Tunisian manufacturers is currently permitted in Tunisia. 
Specifically, industrial franchising refers to the acquisition, by a 
Tunisian manufacturer (franchisee), of the right to use the 
trademark, brand name, and production process for a product under 
license.  He cited the French dairy manufacturer, Sodiaal, which has 
granted a license for the production of its 'Candia' brand to 
Tunisie Lait (a local dairy producer) and the Italian tire 
manufacturer that has licensed its brand, 'Pirelli' to Stip (a 
Tunisian tire manufacturer).  This kind of industrial franchising 
gives the franchisee the right to manufacture the licensed products 
in Tunisia and to set up their own distribution system and 
commercial stores in which to sell the final product.  The primary 
condition for this type of franchise to exist in Tunisia is that the 
product must be manufactured domestically. 
 
--------------------------------- 
COMMERCIAL FRANCHISING IN TUNISIA 
--------------------------------- 
 
¶7. (SBU)  Laouini explained that there are some commercial 
franchises that had been approved on a case by case basis.  These 
franchises received special authorization to operate, after the 
benefits and positive contribution to the local economy had been 
ascertained.  He used the example of the existence of several French 
ISO international certifying agencies operating in Tunisia.  These 
agencies facilitate the rehabilitation of Tunisian companies by 
helping them obtain relevant ISO certifications.  Laouini added that 
the GOT has also concluded several preferential bilateral agreements 
with Algeria, Libya and France allowing commercial franchises from 
these countries.  He cited hyper-markets Carrefour and Geant as 
examples of French franchises that had opened under these 
agreements. 
 
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COMMENT 
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¶8. (SBU)  Laouini is the first GOT official to express interest in 
US-GOT cooperation on the new services and franchising law.  The 
upcoming CLDP visit is particularly timely, as it will provide the 
opportunity to offer assistance in crafting the final services 
legislation, particularly as it relates to franchises, so that it 
creates a favorable legislative and regulatory environment for US 
franchising in Tunisia.  Post will continue to encourage Laouini or 
other GOT representatives to attend the April 2008 International 
Franchising Show and meet with relevant US officials to discuss 
franchise and/or services legislation.  End Comment.