Lease of intangible
Management lease = lease of the business as a whole (fonds de commerce), not of the premises — manager acquires no statutory right to renew the commercial lease
Mandatory regime
Arts. L. 144-1 to L. 144-13 are of mandatory application — cannot be contracted away, regardless of the label the parties use
Clientele = the test
The key distinction from a commercial lease: was a genuine existing clientele transferred? No clientele = courts will recharacterise as a commercial lease
2-year prescription
Claim to recharacterise a management lease as a commercial lease: 2 years from signature (Art. L. 145-60). Reverse claim: 5 years under general law (Art. 2224 C. civ.)

What a Management Lease Is — and Is Not

Under Article L. 144-1 of the Code de commerce, a management lease (location-gérance or gérance libre) is any contract by which the owner or operator of a commercial or artisanal fonds de commerce grants its operation to a manager (locataire-gérant) who runs it at their own risk and pays a management fee (redevance) in return. The rules are mandatory: they cannot be contracted away, whatever label the parties use.

The management lease is legally a lease of an intangible movable asset — the business as a whole — not a lease of the premises. The commercial lease of the premises remains a distinct instrument; the business owner (if a tenant) remains responsible to the building landlord for compliance with the lease terms. The manager has no direct right to renew the commercial lease.

Management lease — key characteristics
Location-gérance (Arts. L. 144-1 to L. 144-13)
  • Transfers operation of the fonds de commerce (business as a whole) including existing clientele
  • Manager operates at their own risk and pays a redevance
  • Manager acquires no statutory right to renew the commercial lease of the premises
  • Must be published in a legal gazette within 15 days — until publication, business owner and manager are jointly liable for manager's operational debts (Art. L. 144-7)
  • No minimum prior exploitation period since 21 July 2019 (former 2-year rule abolished)
  • Subletting prohibition in the commercial lease does not automatically catch a management arrangement (Cass. 3e civ., 25 Oct. 1968)
Commercial lease — key contrast
Bail commercial (Arts. L. 145-1 et seq.)
  • Transfers use of the premises only — no clientele is transferred at entry
  • Tenant builds their own clientele and owns the fonds de commerce
  • Tenant has a statutory right to renewal and right to an eviction indemnity on refusal
  • Franchisees: local clientele belongs to the franchisee, not the franchisor — franchisees are commercial tenants, not managers (Cass. 3e civ., 27 March 2002)
  • Recharacterisation claim from management lease: 2-year prescription from signature (Art. L. 145-60)

Conditions and Effects of the Management Lease

Publication: A Step With Serious Financial Consequences

The management lease must be published in a legal gazette within 15 days of execution. Until publication, the business owner and manager are jointly and severally liable for all debts contracted by the manager in connection with the operation of the business (Art. L. 144-7). Third parties' prior knowledge of the arrangement does not substitute for formal publication. Where management leases are renewed by successive contracts rather than tacit extension, each contract requires fresh publication. At termination, a further publication is required, and all debts relating to operation of the business become immediately payable (Art. L. 144-9).

The Building Landlord's Position

The business owner who is a commercial tenant remains responsible to the building landlord for lease performance. A subletting prohibition in the commercial lease does not automatically catch a management arrangement — these are legally distinct (Cass. 3e civ., 25 October 1968). However, a personal exploitation clause or a broad "no occupation by any third party" clause can prevent management arrangements. Where both the building and the business are in the same hands and combined in a single contract, Article L. 145-46 requires the landlord to pay the manager an improvement indemnity on departure for material improvements made with the business owner's express agreement.

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Note — The Manager Has No Renewal Right Against the Building Landlord

The right to renew the commercial lease of the premises belongs to the business owner as tenant, not to the manager. While the manager is in place, they benefit from the owner's right of possession — if the building landlord refuses renewal, both can remain until eviction is resolved. But when the management lease ends, the manager has no independent claim against the building landlord and must vacate when the business owner does.

Recharacterisation: When Courts Change the Label

The key question in both directions is the same: was there a genuine clientele transferred to the manager, or was the arrangement simply a lease of premises and equipment?

Management lease → commercial lease
Recharacterised When No Genuine Clientele Existed
Where all that was really transferred was use of the premises — no genuine existing clientele — courts treat the contract as a commercial lease. Found in:

• Business was inactive and had no clientele at time of arrangement (Cass. 3e civ., 17 June 1975)
• Period between tenant taking the lease and placing business "in management" too short to have built any real clientele — one month held insufficient (CA Paris, 5 July 2023)
• Business ceased trading long enough to destroy whatever clientele previously existed (Cass. 3e civ., 30 Jan. 2002)
• Franchisee: local clientele belongs to the franchisee, not the franchisor — cannot be structured as a management lease to deny commercial lease protections (Cass. 3e civ., 27 March 2002)

Prescription: 2 years from signature (Art. L. 145-60), even through renewals
Commercial lease → management lease
Recharacterised When Clientele Was Transferred at Entry
Where the arrangement described as a commercial lease involves the transfer of an existing clientele to the "tenant" — who has no independent clientele, operates equipment and goodwill belonging to the other party, and does not own the business — courts treat the contract as a management lease. Consequence: the protections of the commercial lease statute do not apply (Cass. 3e civ., 14 March 1968; Cass. com., 14 Dec. 1993).

This leaves the "tenant" without a right to renewal or eviction indemnity, and subject to the mandatory management lease regime instead.

Prescription: 5 years under general law (Art. 2224 C. civ.)
Management Lease: Practical Points
  • Lease of the business, not the premises: manager acquires no statutory renewal right against the building landlord. Business owner remains responsible to the building landlord for lease performance throughout the management period.
  • Publish within 15 days (Art. L. 144-7): until publication, business owner and manager are jointly liable for the manager's operational debts. Third parties' prior knowledge is not a substitute. Each successive contract (not tacit extension) requires fresh publication. At termination: publish and note all debts become immediately due (Art. L. 144-9).
  • Subletting clause does not automatically block management arrangement (Cass. 3e civ., 25 Oct. 1968) — but a personal exploitation clause or "no third party occupation" clause can. If uncertain, seek advice before structuring the arrangement.
  • Central distinction: genuine existing clientele. No clientele = courts will recharacterise as commercial lease. Franchisees own their local clientele and are commercial tenants, not managers — cannot be denied commercial lease protections through management lease structure (Cass. 3e civ., 27 March 2002).
  • Prescription: claim to recharacterise management lease as commercial lease = 2 years from signature (Art. L. 145-60), even through renewals (CA Paris, 5 June 2019). Reverse claim (commercial lease → management lease) = 5 years under Art. 2224 C. civ.
Structuring a Management Lease or Challenging an Arrangement?

Whether you are a business owner considering placing your fonds de commerce in management, a manager questioning whether you hold a commercial lease, or a building landlord assessing the impact of a management arrangement, we advise on the structuring, documentation, and characterisation of these arrangements.

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This article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Laws and regulations may have changed since publication. Always seek qualified French legal advice on management leases and their relationship to commercial leases.