In Ukraine, the franchise agreement è recently became part of business practices. According to’art. 1115 of the Ukrainian Civil Code by virtue of the franchise contract one party (“pravovladelez” a.k.a. franchisee) grants to the’other party (“polsovatel” – franchisor), for a fee, the right to use in accordance with the precise indications of the’set of rights belonging to the former with purposes of production or sale of goods or services.

The precise definition of the contractual case is provided by Art. 366 of the Code of Ukrainian Domestic Rules, where the franchise contract presupposes that one party is obliged to grant to the other, for a certain period, the right to use in the franchisor's business activity the rights belonging to the franchisee, while the franchisor is obliged to observe and comply with the imposed conditions of use and to pay the franchisee the agreed consideration.

The subject matter of the franchise agreement may consist of a trademark, business know-how, trade secrets, name, invention and other intangible assets.

Essential requirements of the franchise contract
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Article 1118 Ukrainian Civil Code for the franchise contract requires, under penalty of nullity, the written form. In addition, such a contract must be registered with the same institution that registered the right granted franchise. In case the franchisee is a foreign entity, the registration of the contract will have to be done at the’Institution at which è the same franchisor was originally registered.

The rule places among the essential requirements of the franchise agreement: the conclusion of the agreement having as its object the right to use identified assets, the transfer by the franchisor of the power to use the right granted, the patrimoniality of the use.

The Ukrainian Civil Code expressly defines the duties and obligations of the franchisor and the franchisee. It should be noted that the franchisee is vicariously liable for any claims made against the franchisor.

In the event that the franchisor may qualify as a manufacturer, the franchisee è jointly and severally liable in the event of a defective product, but retains the right of recourse against the franchisor. However, the consumer or user of the service may bring suit directly against the franchisee only if the franchisor has refused to make good such damage.

Amendments to the distribution contract under Ukrainian law are permitted by express consent of the parties. Any amendment made to the franchise contract requires a new registration of the amended contract.