Branch Managers and Gérance-Mandat in France

A protected operator between employee and distributor

Some intermediaries devote their activity, exclusively or nearly so, to distributing a supplier's products under conditions the supplier fixes. That produces a state of economic dependence — the operator is, in a real sense, economically integrated into the supplier's business — which does not, by itself, make it an employee, but which French law has chosen to protect through special regimes departing from the ordinary law of mandate. The operator's duties, after all, closely resemble an employee's: it must carry out a mission according to the supplier's instructions and loyally, and render account, so a supplier could otherwise easily place under a mandate a diffuser who would, in substance, deserve employee protection.

To meet that risk, French law has built three protective statuses for physical persons who are non-salaried mandataries economically integrated into a supplier: the non-salaried manager of a retail food branch (Articles L 7322-1 and following of the Labour Code), the broader branch manager (Article L 7321-2), and — more recently and by a different route — the gérant-mandataire of a business (Articles L 146-1 and following of the Commercial Code). Each protects the operator in its relationship with the supplier; and, crucially for a foreign company, each can attach even though the operator was never intended to be an employee.

The branch manager (gérant de succursale, Article L 7321-2)

The central figure is the branch manager of Article L 7321-2 of the Labour Code, which implicitly targets the exclusive diffuser as a mandatary-consignee. The status attaches, on conditions that the courts appraise concretely and generously, to a person whose profession consists essentially either in selling goods supplied exclusively or almost exclusively by a single enterprise, or in collecting orders or receiving goods to treat, handle or transport for a single enterprise — where that person carries on its profession in premises supplied or approved by that enterprise, and at conditions or prices imposed by it. Though sometimes loosely called a "salaried manager", such an operator is, strictly, non-salaried: it is bound to the supplier not by a contract of employment but by a mandate, and the status reflects, once again, an economic dependence rather than a legal subordination.

Two of the conditions deserve emphasis because they recur in every network. The requirement of premises supplied or approved is satisfied not only where the supplier owns the outlet, but where it lets the premises, helps the operator acquire or equip them, or defines the fixtures the operator must use. And the requirement that prices be imposed by the supplier is the clearest expression of the operator's economic dependence — an operator deprived of any autonomous pricing policy. That condition also has a structural consequence: because Article L 442-6 of the Commercial Code forbids a supplier from imposing a minimum resale price on a distributor, an operator whose resale prices are imposed can only be a mandatary or a commission agent, not a reseller buying and reselling on its own account.

All the conditions must be met for the social regime to apply, though they may be spread across several interdependent contracts. Where they are met, the status is of public order: the operator may renounce it only after the contract has ended, not before. A frequently litigated point is the legal-person "screen": entrusting the outlet to a company does not necessarily defeat the status, which can still apply where the company is fictitious, or where the person claiming it in fact directs the company and personally carries on the protected activity.

What protection the branch manager receives

The branch manager enjoys the advantages that social legislation grants to employees, though its autonomy deprives it of the rules on the organisation of working time — health and safety, working hours, weekly rest, public holidays — unless the supplier fixes its working conditions. During the contract it is entitled to a remuneration at least equal to the statutory minimum wage (SMIC) or the conventional minimum, to payment for overtime the supplier imposes and it performs itself, to a share in the fruits of the enterprise's expansion, to statutory rest and paid leave where it does not freely set its own hours, and to social security; it must also be counted in the parent enterprise's headcount and have access to staff-representation bodies.

On termination, the protection is substantial. Before ending the contract the parent must look for possibilities to redeploy the manager; where the parent takes the initiative to terminate, the manager is entitled to a notice period and to redundancy indemnities, to unemployment benefits on the terms applicable to dismissed employees, to the protective status of union delegates where relevant, and to a financial counterpart for any post-contractual non-compete. A grave fault by the manager cannot, of itself, remove all the advantages granted under social law. The one notable difference from a salaried manager is a wider financial liability: the non-salaried branch manager answers for the whole of an inventory deficit even without gross fault, save contrary agreement or an external cause — and disputes about that deficit, being about the commercial exploitation, do not go before the labour court.

The archetype of the whole regime, historically, is the non-salaried manager of a retail food branch (Article L 7322-1), whose defining condition is autonomy — freedom to hire and dismiss staff, to set their working conditions and pay, or to have itself replaced. Such a manager is a civil mandatary, not a merchant, yet receives the near-complete social protection just described; and it is itself the employer of the branch's staff where it can freely hire and dismiss them, the parent being the employer only where it imposes the number of employees, authorises recruitment, decides dismissals and fixes working conditions.

The mandate character of the relationship also shapes how it ends. The management contract is not revocable on the ordinary terms of a mandate, precisely because the social-law provisions applicable to the manager override that freedom; but it does come to an end on the death of the manager or of the mandant where the latter is a physical person (Article 2003 of the Civil Code). Where the management is entrusted to a couple, under the arrangement known as gérance-ménage, it can also end on the dissolution of the marriage, or on the gross fault of one spouse where their solidarity is established on the conditions of Article 1995 of the Civil Code. These are reminders that, for all its social protection, the branch manager remains, in its legal form, a mandatary rather than an employee.

The gérant-mandataire of a business (Article L 146-1)

A more recent, and distinctively commercial-law, protection is the statute of the gérant-mandataire of a fonds de commerce or artisanal business, in Articles L 146-1 and following of the Commercial Code — designed above all for the operator acting "within a network." It applies to any physical or legal person who satisfies three cumulative conditions: it is a mandatary or commission agent for the exploitation of a business that is not a retail food branch or a consumer cooperative, which it manages for the owner's account and in accordance with the mission the owner fixes, the owner-mandant bearing the risks of the exploitation; it is remunerated by a commission that is a function of turnover — a fixed remuneration would mean only its labour is bought, and would signal employment; and it is autonomous, with full latitude, within the mission fixed by the mandant, to determine its working conditions, hire staff and arrange substitutes at its own cost and responsibility.

The contract may specify the norms of management and exploitation of the business and the ways the mandant may control it, without causing requalification. But imposing norms that cover every condition of the activity — prices, the welcome and choice of customers, the keeping of accounts — to be strictly applied, must lead to requalification, either as a contract of employment or as a branch manager under Article L 7321-2. The line is thus between a mandate whose mission is defined and one whose every operational detail is dictated — the former is a genuine gérance-mandat, the latter tips into employment or the branch-manager status.

The statute brings its own protective mechanics. The gérant-mandataire is registered with the trade and companies register, and the management contract is published. At least one month before signing, the owner must give the future gérant-mandataire the information necessary to its mission (Article L 146-2) — the mandant's identity, the address and history of the business, its turnover over the last two financial years, its affiliation to a network, the general conditions of management, the elements of the commission, and the conditions of duration and termination of the contract — so that it may commit in full knowledge; a breach of that duty voids the contract only where the operator's consent was actually vitiated. And where the mandant concludes several gérance-mandat contracts, it must set, in a framework agreement, the minimum guaranteed commission applying in all of them (Article L 146-3).

Conflicts of qualification — and how operators structure around them

These statuses overlap, and the overlaps are consequential because more than one public-order protection can be in play at once. A physical person who manages a business for its owner's account, with freedom to hire staff, and who also sells goods supplied almost exclusively by the mandant at imposed conditions and prices, can meet both the gérant-mandataire definition (Article L 146-1) and the branch-manager definition (Article L 7321-2). Because both are mandatory protective statuses, the sound resolution is not to pick one and discard the other — that risks disapplying public-order rules — but to apply, provision by provision, whichever rule is more favourable to the operator, so that no imperative protection is breached. A comparable conflict can arise with the commercial-agent statute, where the same operator could be characterised as an agent as well.

Suppliers have long sought ways to keep operators outside these regimes, and the source material catalogues them. Interprofessional collective agreements have been used to remove one of the conditions of Article L 7321-2 — validly, since the protection ceases to apply once the conditions are not all met — in exchange for pecuniary advantages. A contrat estimatoire or dépôt-vente can turn the operator into a genuine reseller who fixes its own resale price, since the supplier cannot then impose it. And a presumption of non-salaried status protects operators registered with the trade and companies register, the national business register, the commercial-agents register or a non-salaried social-security scheme (Article L 8221-6 of the Labour Code) — a presumption rebuttable only by proof of a permanent relationship of legal subordination. But each of these devices works only if the relationship genuinely changes; a label that leaves the substance intact will not defeat a public-order status.

There is also a way to obtain certainty in advance on the social-security question. A mandatary uncertain of its position may ask the bodies charged with collecting general-scheme contributions whether its activity subjects it to that scheme. If the answer is negative, or if none is given within two months of the request, affiliation to the general scheme cannot be imposed on it — unless the conditions of its activity have been substantially modified, or the information it provided was inaccurate. And where the operator is registered with the trade and companies register, the national business register, the commercial-agents register or a non-salaried social-security scheme, it is presumed not to be bound by a contract of employment for the registered activity, a presumption that falls only on proof of a permanent legal subordination. These mechanisms give a foreign company a route to test, before it commits, whether its intended structure keeps the operator outside the salaried social regime — though they do not, of themselves, resolve the distinct branch-manager and gérant-mandataire statuses, which rest on economic dependence rather than subordination.

What this means for a foreign company running a network

For a foreign company operating, or planning, a managed network in France — stores run by local operators under its brand and control — the message is that the intermediary categories reach a long way towards employment. An operator that sells the company's goods, in premises the company supplies or approves, at prices the company sets, is a strong candidate for the branch-manager status, with its minimum remuneration and its termination protections; and an operator running a business for the company's account within a network is a candidate for the gérant-mandataire statute, with its pre-contractual disclosure and guaranteed minimum commission. Neither status depends on the parties intending an employment relationship, and both are public order and cannot simply be contracted away.

The practical course is therefore to decide, at the design stage of the network, which regime is intended and to structure the relationship accordingly: to leave the operator genuine pricing and management autonomy if these statuses are to be avoided, or to accept and provide for their consequences if they are not. As with every intermediary in French distribution law, the classification follows the substance of the arrangement, not its label — and here the substance is read, if anything, rather more generously in the operator's favour, because two distinct bodies of protective law, social and commercial, stand ready to apply and to overlap.

Frequently asked questions about branch managers and gérance-mandat

What is a gérant de succursale in France?

A branch manager under Article L 7321-2 of the Labour Code: a person who essentially sells goods supplied exclusively or almost exclusively by one enterprise (or collects orders / receives goods for it), in premises the enterprise supplies or approves, at conditions or prices it imposes. Though not strictly an employee, it receives social-law protection for its economic dependence.

Is a branch manager an employee?

No — it is a non-salaried mandatary, bound by a mandate rather than a contract of employment. But it enjoys most of the advantages social law grants employees, including a minimum remuneration and, on termination, notice and redundancy indemnities. The status rests on economic dependence, not legal subordination.

What is a gérant-mandataire under Article L 146-1?

A commercial-law statute for an operator who manages a business (not a food branch) for its owner's account, within the owner's fixed mission, the owner bearing the exploitation risk, remunerated by a commission on turnover, and autonomous in its working conditions. It brings pre-contractual disclosure (Article L 146-2) and, across several contracts, a guaranteed minimum commission (Article L 146-3).

Why does imposing resale prices matter?

Because a supplier cannot impose a minimum resale price on an independent distributor (Article L 442-6). An operator whose resale prices are imposed can therefore only be a mandatary or commission agent — and, if the other conditions are met, a protected branch manager rather than a free reseller.

Can these statuses apply to a company, not just an individual?

The branch-manager social status is for physical persons, but it can apply through a legal-person "screen" where the company is fictitious or where the person claiming it actually directs the company and personally carries on the activity. The gérant-mandataire statute (Article L 146-1) expressly covers physical or legal persons.

What pre-contractual information is owed to a gérant-mandataire?

At least one month before signing (Article L 146-2), the owner must provide the information necessary to the mission — its identity, the business's address, history and last two years' turnover, network affiliation, general management conditions, the commission elements, and the duration and termination conditions. Breach voids the contract only if consent was actually vitiated.

Key takeaways

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This article is for general information only. It does not constitute legal advice. Whether a branch-manager or gérant-mandataire status applies is fact-specific and generously appraised. Contact our French lawyers for qualified advice before setting up a managed network or on a termination.