Carrefour's Franchising Model Is Potentially at Risk -- Market Talk

Dow Jones06-19

1321 GMT - Carrefour's share drop on Tuesday after the French Finance Ministry recommended a EUR200 million penalty for alleged abusive practices toward franchisees and requested that the group modify its franchise agreements suggests that the market sees the legal trouble as a significant challenge to Carrefour's franchising model, UBS analysts say. Uncertainty could be protracted if the legal procedure drags on for some time before coming to a resolution, they say in a note. Furthermore, it is unclear if changing some clauses in Carrefour's franchising agreements could prompt a change in the overall franchising approach, the analysts say. "It is still too early to assess the impact from the proposals but it appears the shares [on June 18] are likely pricing in the worst impact," they add. Shares are flat at EUR13.92. (michael.susin@wsj.com)

(END) Dow Jones Newswires

June 19, 2024 09:21 ET (13:21 GMT)

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