Article 62 of the Law 7/1996 on Retail Trade (the Retail Trade Act), provides a definition of franchising as well as conditions for this legal regime in Spain. Furthermore, it led to the development of Royal Decree 2485/1998, which introduced in Spanish law an improvement on the notion of preliminary agreements in the franchise contract.

This Law regulates, in general terms, the activity of retail trade providing what is understood to be “good commercial practices” that must apply to any franchisee operating as a retailer in the market and establishes a framework for the relationship between the franchisor and the intended franchisee.