You opened your French subsidiary, fitted out the office or the shop, hired staff and built a customer base. Then a letter arrives from your French landlord: he refuses to renew your commercial lease, or he offers a renewal at a rent your business cannot pay. For a foreign founder or a foreign parent company, this moment is dangerous. French commercial leases, called baux commerciaux, give the tenant a protected right to stay that has no equivalent in many common-law systems, but that protection only works if you react fast, in French procedural forms and within strict deadlines. A missed two-year deadline can wipe out a compensation worth several years of profit, and an informal email exchange can turn into an eviction with no payment at all.

This guide explains, in plain English, what your landlord must do to take the premises back, what he must pay you and how your company stays protected. You will learn the exact form a termination notice, called a congé, must take, how the eviction compensation, called indemnité d’éviction, is calculated, how courts punish landlords who disguise a refusal as a fake renewal offer and how the revised rent is set when the lease continues. You will also learn the traps that typically catch foreign tenants: short-term arrangements that look flexible but destroy renewal rights, and the two-year time limit that quietly kills both your money and your right to remain. Every rule below comes from the French Commercial Code and from recent decisions of the Cour de cassation, the highest civil court in France, quoted word for word so you can check each statement against the official text. If your company received a congé or a renewal offer in the last few months, read Part I immediately and calendar the deadlines in Part II, Section B before you answer your landlord.

I. Your landlord refuses to renew your French commercial lease: the termination notice he must serve and the eviction compensation he owes you

A. How your landlord ends your lease: the six-month congé that must state its reasons or fail

French law starts from a simple principle: a commercial lease lasts at least nine years. Article L. 145-4 of the Commercial Code provides that “La durée du contrat de location ne peut être inférieure à neuf ans” (The term of the lease may not be less than nine years), while the tenant, called the preneur, “a la faculté de donner congé à l’expiration d’une période triennale, au moins six mois à l’avance” (may give notice at the end of each three-year period, at least six months in advance). Lawyers nickname this the 3/6/9 lease: the tenant can leave every three years while the landlord stays locked in. For your company, this means the landlord cannot simply wait for year nine and change the locks. He must serve a formal notice, and that notice must follow strict rules on timing, form and content.

The central rule sits in Article L. 145-9 of the Commercial Code. Commercial leases “ne cessent que par l’effet d’un congé donné six mois à l’avance ou d’une demande de renouvellement” (end only through a notice given six months in advance or a renewal request). If nobody serves anything, a written lease “se prolonge tacitement au-delà du terme fixé par le contrat” (is tacitly extended beyond the term fixed in the contract), and during that tacit extension the notice must still be given at least six months ahead, for the last day of a calendar quarter. The congé itself “doit être donné par acte extrajudiciaire”, meaning it must be served by a commissaire de justice (the court officer formerly called huissier de justice), not by simple email or registered letter. Most importantly for a foreign owner reading a French document, the notice “doit, à peine de nullité, préciser les motifs pour lesquels il est donné” (must, on pain of nullity, state the reasons for which it is given) and must tell the tenant that anyone wishing to contest the notice or claim eviction compensation “doit saisir le tribunal avant l’expiration d’un délai de deux ans à compter de la date pour laquelle le congé a été donné” (must apply to the court before the expiry of a two-year period running from the date for which the notice was given).

That last sentence is the one foreign tenants most often overlook. The two-year clock starts on the effective date written in the notice, not on the day you find a lawyer or the day negotiations break down. The Cour de cassation applies it strictly. In a decision of 12 February 2026, the Third Civil Chamber held that “la mauvaise foi du bailleur n’est pas une cause d’interruption ou de suspension de la prescription biennale de l’action en paiement de l’indemnité d’éviction, laquelle court à compter de la date d’effet du congé même lorsqu’il est délivré avec offre d’indemnité d’éviction” (the landlord’s bad faith is no ground for interrupting or suspending the two-year limitation of the action for payment of the eviction indemnity, which runs from the effective date of the notice even when the notice offers an eviction indemnity), adding that “le locataire est occupant sans droit ni titre des locaux à compter de la date de prescription de son action en fixation d’une indemnité d’éviction” (the tenant occupies the premises without right or title from the date on which his action to fix the eviction indemnity becomes time-barred) (Cass. 3rd civ., 12 February 2026, No. 24-10.578). In that case the tenant had waited, trusting the landlord’s promises of an expert valuation, and lost both the money and the right to stay. The lesson for a company run from abroad is blunt: calendar the two-year date the day the congé arrives, and file a protective court claim before it expires even while you negotiate.

Form defects are your first line of defence, and they are common. A congé sent by email, a notice that states no reason, or a notice that forgets the mandatory warning about the two-year court deadline can be annulled. Have every document checked by French counsel within days of receipt, because nullity arguments must be raised in court and never operate automatically. If the notice is void, the lease continues and the landlord must start again, which buys your company time and leverage.

B. What your landlord must pay you: the eviction indemnity that covers your full loss

When the landlord takes the premises back without a statutory exemption, he pays. Article L. 145-14 of the Commercial Code states that “Le bailleur peut refuser le renouvellement du bail. Toutefois, le bailleur doit, sauf exceptions prévues aux articles L. 145-17 et suivants , payer au locataire évincé une indemnité dite d’éviction égale au préjudice causé par le défaut de renouvellement” (The landlord may refuse to renew the lease. However, the landlord must, except as provided in Articles L. 145-17 and following, pay the evicted tenant an indemnity, known as an eviction indemnity, equal to the loss caused by the failure to renew). The same article details the content: “Cette indemnité comprend notamment la valeur marchande du fonds de commerce, déterminée suivant les usages de la profession, augmentée éventuellement des frais normaux de déménagement et de réinstallation, ainsi que des frais et droits de mutation à payer pour un fonds de même valeur, sauf dans le cas où le propriétaire fait la preuve que le préjudice est moindre” (This indemnity includes in particular the market value of the business, determined according to professional practice, increased where appropriate by the normal costs of removal and reinstallation, as well as the transfer taxes and duties payable for a business of the same value, unless the owner proves that the loss is smaller).

Three terms in that paragraph deserve an explanation for a business reader. The fonds de commerce is the going business attached to the premises: clientele, trade name, lease right, equipment and licences, valued at market price including the location premium of a Paris street or a busy suburban zone. The frais de déménagement et de réinstallation are the normal costs of moving and setting up again. The droits de mutation are the registration taxes a buyer pays when acquiring an equivalent business. Together they often reach several years of rent, and for a well-placed shop they can exceed the company’s share capital. That is why the indemnity is the financial heart of every non-renewal file: foreign headquarters that carry the French unit at cost in group accounts regularly underestimate what French law awards at market value.

The right to renewal, and therefore to the indemnity, belongs to the business actually run on the premises. Article L. 145-8 of the Commercial Code provides that “Le droit au renouvellement du bail ne peut être invoqué que par le propriétaire du fonds qui est exploité dans les lieux” (The right to renewal of the lease may only be relied upon by the owner of the business operated on the premises), adding that the business “doit, sauf motifs légitimes, avoir fait l’objet d’une exploitation effective au cours des trois années qui ont précédé la date d’expiration du bail” (must, unless there are legitimate grounds, have been effectively operated during the three years preceding the expiry date of the lease). A dormant subsidiary, a brass-plate company with no activity or premises left empty for years may therefore receive nothing. If your French unit slowed down during restructuring, document the legitimate reason, such as health, collective proceedings or authorised works, and restart genuine operation as early as possible.

The landlord escapes payment only through narrow statutory doors, and the main one is serious breach by the tenant. Article L. 145-17 of the Commercial Code allows refusal without any indemnity “S’il justifie d’un motif grave et légitime à l’encontre du locataire sortant” (If he shows serious and legitimate grounds against the outgoing tenant). But the tenant’s protection is strong: where the complaint is a breach of an obligation or an unjustified shutdown of the business, “l’infraction commise par le preneur ne peut être invoquée que si elle s’est poursuivie ou renouvelée plus d’un mois après mise en demeure du bailleur d’avoir à la faire cesser” (the breach may only be relied upon if it continued or recurred more than one month after formal demand by the landlord to stop it), and “Cette mise en demeure doit, à peine de nullité, être effectuée par acte extrajudiciaire, préciser le motif invoqué et reproduire les termes du présent alinéa” (This formal demand must, on pain of nullity, be served by extrajudicial act, state the ground relied upon and reproduce the wording of this paragraph). In practice, unpaid rent, unauthorised subletting or persistent nuisance only justify a free eviction if the landlord first served a compliant formal demand and your company failed to cure within a month. If you receive a mise en demeure (formal demand) from your landlord, treat it as an emergency: pay or cure within the month, keep written proof and never assume an informal warning letter counts. Conversely, if the landlord claims a serious ground but never served that specific demand, his refusal to pay collapses and your company keeps its right to full compensation.

Landlords sometimes try a cheaper route: instead of openly refusing renewal, they offer a renewal on drastically different terms, such as half the floor space, a changed permitted activity or new obligations the business cannot accept, hoping the tenant will walk away with nothing. The Cour de cassation closed that door. In a decision of 11 January 2024, the Third Civil Chamber restated the principle that “à défaut de convention contraire, le renouvellement du bail commercial s’opère aux clauses et conditions du bail venu à expiration, sauf le pouvoir reconnu au juge en matière de fixation de prix” (absent agreement to the contrary, renewal of a commercial lease takes place on the clauses and conditions of the expired lease, subject only to the court’s recognised power over rent-setting), and held that “un congé avec une offre de renouvellement du bail à des clauses et conditions différentes du bail expiré, hors le prix, doit s’analyser comme un congé avec refus de renouvellement ouvrant droit à indemnité d’éviction” (a notice offering renewal on clauses and conditions different from the expired lease, apart from the rent, must be treated as a notice refusing renewal, giving rise to eviction compensation) (Cass. 3rd civ., 11 January 2024, No. 22-20.872). Only the rent itself may be rediscussed at renewal; every other clause carries over. If your landlord’s renewal offer shrinks your space, bans part of your activity or shifts major works onto your company, French law treats that letter as a refusal and the full compensation becomes due. Do not sign such an offer under time pressure, and do not reject it by phone either: reply in writing that you consider the offer a disguised refusal opening your right to compensation, and have your lawyer file the protective court claim within the two-year period.

Until the compensation is paid, your company has a powerful shield: the right to stay. Article L. 145-28 of the Commercial Code provides that “Aucun locataire pouvant prétendre à une indemnité d’éviction ne peut être obligé de quitter les lieux avant de l’avoir reçue. Jusqu’au paiement de cette indemnité, il a droit au maintien dans les lieux aux conditions et clauses du contrat de bail expiré” (No tenant entitled to claim an eviction indemnity may be forced to leave the premises before receiving it. Until payment of this indemnity, he is entitled to remain in the premises on the terms and conditions of the expired lease). But as the February 2026 decision shows, that shield expires with the two-year limitation: once the action is time-barred, the tenant becomes an occupant without right or title and can be expelled. The commercial lesson of this section is straightforward. First, have every congé and every renewal offer reviewed by French counsel within days, because the legal characterisation of the document decides whether compensation changes hands. Second, never cure a breach late: the one-month window after a formal demand is the cheapest insurance your company will ever buy. Third, value the fonds de commerce early through an independent valuer, because negotiation without a number is surrender.

II. How your French company stays, pays the right rent or leaves safely: renewal rent, short-lease traps and the deadlines that decide everything

A. How your new rent is set when the lease continues: market rental value, the index cap and the judge who decides

When the lease is renewed, either because the landlord accepts renewal or because he exercised his right to change his mind, the rent is renegotiated within a legal frame that favours stability. Article L. 145-33 of the Commercial Code states that “Le montant des loyers des baux renouvelés ou révisés doit correspondre à la valeur locative” (The amount of rent for renewed or revised leases must correspond to the rental value), determined, absent agreement, on the basis of five factors: “1 Les caractéristiques du local considéré ; 2 La destination des lieux ; 3 Les obligations respectives des parties ; 4 Les facteurs locaux de commercialité ; 5 Les prix couramment pratiqués dans le voisinage” (1 The characteristics of the premises; 2 Their permitted use; 3 The respective obligations of the parties; 4 Local commerciality factors; 5 Prices commonly charged in the neighbourhood). The valeur locative (market rental value) is therefore a documented local price, not whatever the landlord announces. Your company should build its own file early: comparable rents in the street, footfall and transport data, photographs of the condition of the premises and a list of works each party paid for, because the judge appoints an expert who reasons from exactly that material.

Even if the market value has risen sharply, the increase is normally capped. Article L. 145-34 of the Commercial Code provides that “A moins d’une modification notable des éléments mentionnés aux 1° à 4° de l’article L. 145-33 , le taux de variation du loyer applicable lors de la prise d’effet du bail à renouveler, si sa durée n’est pas supérieure à neuf ans, ne peut excéder la variation, intervenue depuis la fixation initiale du loyer du bail expiré, de l’indice trimestriel des loyers commerciaux ou de l’indice trimestriel des loyers des activités tertiaires” (Unless there has been a significant change in the factors listed in 1° to 4° of Article L. 145-33, the rate of change of the rent applicable when the renewed lease takes effect, if its term does not exceed nine years, may not exceed the change, since the initial setting of the rent of the expired lease, in the quarterly commercial-rent index or the quarterly tertiary-activities rent index). Those indices, the ILC for shops and the ILAT for offices, are published by INSEE, the French national statistics institute. In plain terms, a nine-year lease normally renews at the old rent adjusted by the index, which protects a foreign tenant against a sudden doubling imposed from a head office spreadsheet in another country.

The landlord can only break that cap, a move lawyers call déplafonnement (uncapping), by proving a significant change in the premises, their use, the parties’ obligations or local commerciality, or by other statutory exceptions. Courts examine that claim closely. In a decision of 15 February 2023, the Third Civil Chamber recalled that the tenant’s protected “propriété commerciale” (commercial property right) “s’entend du droit au renouvellement du bail commercial consacré par les articles L. 145-8 à L. 145-30 du code de commerce” (means the right to renewal of the commercial lease enshrined in Articles L. 145-8 to L. 145-30 of the Commercial Code), and held that a complaint limited to the price of the renewed lease “n’entre pas dans le champ de cette protection” (does not fall within the scope of that protection), rejecting the tenant’s challenge to a rent fixed at market rental value with expert evidence (Cass. 3rd civ., 15 February 2023, No. 21-25.849). The practical message runs both ways. A landlord cannot obtain uncapping simply by pointing to a more profitable activity he imagines; he must prove a genuine, significant change assessed at the renewal date. A tenant cannot block a justified market rent by invoking his renewal right, which protects staying, not paying less. If your landlord demands an uncapped rent, ask for the written justification factor by factor, compare each claim with photographs and planning records, and let the juge des loyers commerciaux (the specialist commercial-rent judge within the local tribunal judiciaire, the civil court) decide with an expert report rather than accepting the figure in correspondence.

Procedure matters as much as price. A landlord who wants a different rent without opposing renewal must state the rent he proposes in the notice or in his reply to a renewal request. Article L. 145-11 of the Commercial Code requires the landlord to “faire connaître le loyer qu’il propose, faute de quoi le nouveau prix n’est dû qu’à compter de la demande qui en est faite ultérieurement” (state the rent he proposes, failing which the new price is only due from a later request made for that purpose). A landlord who forgets that step keeps receiving the old rent until he makes a proper later demand. Conversely, any clause in the lease that tries to kill the renewal right in advance is void. Article L. 145-15 of the Commercial Code provides that “Sont réputés non écrits, quelle qu’en soit la forme, les clauses, stipulations et arrangements qui ont pour effet de faire échec au droit de renouvellement institué par le présent chapitre” (Clauses, stipulations and arrangements of any form that defeat the right of renewal established by this chapter are deemed unwritten). Automatic rent-escalation machinery and waiver clauses aimed at neutralising renewal have already been struck down by the courts, as this firm’s earlier analysis of the automatic fixed rent increase decision explains, and the same logic protects your company here: read the lease, but remember that mandatory law overrides what the lease says.

One final procedural actor deserves attention: the landlord who refused renewal can change his mind. Article L. 145-58 of the Commercial Code allows the owner, within fifteen days of the final court decision fixing the indemnity, to avoid paying it by accepting renewal instead: “Le propriétaire peut, jusqu’à l’expiration d’un délai de quinze jours à compter de la date à laquelle la décision est passée en force de chose jugée, se soustraire au paiement de l’indemnité, à charge par lui de supporter les frais de l’instance et de consentir au renouvellement du bail” (The owner may, until fifteen days after the date on which the decision fixing the indemnity has become final, avoid paying the indemnity, provided he bears the costs of the proceedings and agrees to renew the lease). This droit de repentir (right of repentance) only works while the tenant is still in the premises and has not already rented or bought replacement premises. For your company, the message is to stay in place and keep the business running while the case proceeds, rather than signing a replacement lease in panic and destroying this fallback.

B. How your company protects itself from abroad: calendar, proof file and the Paris procedure

Distance is the real enemy in these files. The deadlines are short, the acts must follow French forms and the evidence sits in France. A foreign director who manages the dispute by email from another continent, without a local calendar and without a local lawyer, regularly discovers that a deadline expired unnoticed. The method below is designed for a company whose decision-maker lives abroad.

First, the tenant can also take the initiative instead of waiting for the landlord’s notice. Article L. 145-10 of the Commercial Code allows the tenant, absent a notice, to request renewal “soit dans les six mois qui précèdent l’expiration du bail, soit, le cas échéant, à tout moment au cours de sa prolongation” (either within the six months preceding expiry of the lease or, where applicable, at any time during its extension). The request must be served by extrajudicial act or registered letter with acknowledgement of receipt, and “Dans les trois mois de la notification de la demande en renouvellement, le bailleur doit, par acte extrajudiciaire, faire connaître au demandeur s’il refuse le renouvellement en précisant les motifs de ce refus. A défaut d’avoir fait connaître ses intentions dans ce délai, le bailleur est réputé avoir accepté le principe du renouvellement du bail précédent” (Within three months of notification of the renewal request, the landlord must, by extrajudicial act, tell the applicant whether he refuses renewal, stating the reasons for the refusal. If he fails to state his intentions within that period, he is deemed to have accepted renewal of the previous lease). A tenant who is happy in the premises should therefore send a timely renewal request rather than staying silent: silence leads to tacit extension, which preserves rights but leaves the company exposed to a landlord’s notice at any quarter, while a request forces the landlord to answer within three months or be deemed to accept renewal.

Second, every action under this body of law expires after two years. Article L. 145-60 of the Commercial Code states that “Toutes les actions exercées en vertu du présent chapitre se prescrivent par deux ans” (All actions brought under this chapter are subject to a two-year limitation period). Combined with the two-year court deadline written into every congé, this means your company must sue within two years of the notice date to contest it or to claim the indemnity, and the February 2026 ruling adds that even a notice offering compensation starts that clock. Build the calendar on day one: effective date of the notice, plus two years for the court claim; date of any formal demand, plus one month to cure; date of any renewal request, plus three months for the landlord’s reply. Docket these dates in two places, with the French lawyer and at headquarters, so that travel, holidays or a change of internal contact never erases them.

Third, assemble the proof file before the dispute hardens. The company registration extract called the Kbis, issued by the greffe (the registry office of the commercial court), proves which entity holds the lease and who may sign for it. Payroll records declared to URSSAF (the body that collects employers’ social-security contributions) and the annual accounts filed with the registry prove genuine operation of the business over the last three years, which supports the renewal right. Supplier invoices, client lists and marketing material prove the clientele that gives the fonds de commerce its value. Court judgments and company filings appear in BODACC (the official gazette of civil and commercial announcements), which the other side will read, so make sure your filings are consistent. Keep originals in France with your lawyer or accountant and working copies at headquarters, because a landlord who alleges vacancy or under-use will ask the court to draw conclusions from every missing document.

Fourth, understand the Paris and Ile-de-France specifics when your premises are there. The competent court is the tribunal judiciaire of the place where the premises sit, so for Paris that is the Paris court, with its specialist commercial-lease judges and court-appointed valuers who know Paris streets, arcades and suburban retail parks. Paris rents move faster than provincial ones, comparable evidence must be street-level rather than city-wide, and local commerciality factors such as metro works, Olympic-legacy footfall changes or new competing developments must be documented with dates and photographs. Mention Paris and Ile-de-France expressly in your instructions to counsel, because the expert’s comparable set and the judge’s reading of commerciality depend on the exact neighbourhood. Companies elsewhere in France follow the same code with their own local court, but the method is identical.

Fifth, coordinate the lease file with the rest of the company’s French life. A landlord’s allegation of breach often starts with unpaid charges or an unauthorised layout change, so keep rent, charges and insurance paid and documented while the dispute runs. Do not stop paying to put pressure on the landlord: unpaid sums feed the serious-ground argument that could cancel the indemnity entirely. If the group considers moving the registered office, changing the director recorded on the Kbis or transferring the lease within the group, take French advice first, because each of those steps interacts with the lease and with the three-year operation condition. The firm’s legal calendar for foreign-owned French companies helps headquarters track the parallel deadlines for accounts, tax and filings, and the guide to signing a first 3/6/9 lease remains useful for comparing the original clauses with what the landlord now proposes.

Conclusion

A landlord’s refusal to renew is not the end of the story; it is the start of a framed negotiation in which French law gives the tenant serious cards. The congé must arrive six months early, by court officer, with reasons and with the two-year warning, or it can be annulled. The eviction indemnity must cover the full loss, starting with the market value of the business plus moving and transfer costs, unless the landlord proves a serious ground after a compliant one-month formal demand. A renewal offer that rewrites the lease beyond the rent counts as a refusal and opens the same compensation. When the lease continues, the rent follows the market rental value but stays capped by the commercial-rent index unless the landlord proves a significant change, and the rent judge decides with expert evidence. Every one of these actions expires after two years, and since February 2026 it is settled that even a friendly notice offering compensation starts that clock, with loss of both money and premises as the price of waiting. A foreign company that calendars the dates on day one, builds the valuation and operation file in France and files a protective claim while negotiating keeps every option open: staying at a lawful rent, leaving with full compensation or accepting the landlord’s change of mind. A company that answers by email and waits loses all three.

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