Concerning franchising and branding
ANNEX 5Supplementary provisions
ANNEX 5 Concerning franchising and branding 1. The airlines of each Party shall not be precluded from entering into franchise or branding arrangements, including conditions relating to brand protection and operational matters, provided that: they comply, in particular, with the applicable laws and regulations concerning control; the ability of the airline to exist outside of the franchise is not jeopardised; the arrangement does not result in a foreign airline engaging in cabotage operations; and applicable regulations, such as consumer protection provisions, including those regarding the disclosure of the identity of the airline operating the service, are complied with. So long as those requirements are met, close business relationships and cooperative arrangements between the airlines of each Party and foreign businesses are permissible, and each of the following individual aspects, among others, of a franchise or branding arrangement would not, other than in exceptional circumstances, of itself raise control issues: (a) using and displaying a specific brand or trademark of a franchisor, including stipulations on the geographic area in which the brand or trademark may be used; (b) displaying on the franchisee's aircraft the colours and logo of the franchisor's brand, including the display of such a brand, trademark, logo or similar identification prominently on its aircraft and the uniforms of its personnel; (c) using and displaying the brand, trademark or logo on, or in conjunction with, the franchisee's airport facilities and equipment; (d) maintaining customer service standards designed for marketing purposes; (e) maintaining customer service standards designed to protect the integrity of the franchise brand; (f) providing for licence fees on standard commercial terms; (g) providing for participation in frequent flyer programs, including the accrual of benefits; and (h) providing in the franchise or branding agreement for the right of the franchisor or franchisee to terminate the arrangement and withdraw the brand, provided that nationals of the United States or the Member States remain in control of the US or Community airline, respectively. 2. Franchising and branding arrangements are independent of, but may coexist with, a code-sharing arrangement that requires that both airlines have the appropriate authority from the Parties, as provided for in paragraph 7 of Article 10 of this Agreement.