global franchise newsletter sign up graphic

Stay in the know and receive the latest international franchising news, insight and investment opportunities

close catfish

A guide to comprehensive counsel: navigating new markets

A guide to comprehensive counsel: navigating new markets

Your expansive guide to franchising’s legal frameworks, and what a business should look for when it comes to comprehensive counsel

Keep up to date with the latest Global Franchise News sent straight to your inbox. Sign up here.

Interview by Kieran McLoone, deputy editor for Global Franchise.

The legalities of franchising might not be the most outwardly thrilling subject associated with this dynamic and global business model, but it’s a specialism that is intrinsic to international success.

Protecting your brand from a whole litany of legal troubles can only be done with an experienced, knowledgeable team. Foregoing proper system and processes will open a brand up to issues which could damage not only the brand’s reputation, but could also jeopardize an entire franchise network.

To cover everything you need to know and highlight some key trends within the industry, we’ve spoken to several experts from a plethora of legal firms and have prepared a crash course for brands with global ambitions.

This week Carl Zwisler of Lathrop GPM LLP speaks about international polarity.

KM: Which global markets are the most tumultuous from a franchisor perspective, due to regulations and frameworks?

CZ: Based upon laws currently in place and laws that seem to be under serious consideration, franchisors should thoroughly analyze existing laws and proposals in Belgium, California, China, Indonesia, Malaysia, the Netherlands, Saudi Arabia, South Korea, and Thailand.

Belgium has just adopted two new laws: one prohibits “unfair contract terms”. The other prohibits unfair use of economic advantage in agreements, such as franchise agreements. Franchisors are not likely to know the limits of these prohibitions until they have been sued and courts have interpreted the laws.

California has adopted a law that some interpret as characterizing franchise relationships as employer-employee relationships. If that interpretation is upheld by courts, franchisees may sue franchisors for overtime, minimum wage and hours violations, among other claims.

China’s franchise regulations have been in place for a decade, but interpretations continue to evolve. In an apparent response to the U.S. trade sanctions imposed by the Trump administration, franchise registration times have lengthened. On the date of this writing, the full impact of COVID-19 on doing business in China is unknown.

The Malaysia High Court has ruled that the franchise registration section that both the administrator of the law and foreign franchisors have relied on when registering franchises in Malaysia is the wrong section of the law, calling into question whether any foreign franchisors are in compliance with the law.

The Netherlands is about to adopt a franchise law that would impose unrealistic obligations on franchisors. The proposed law actually requires parties to a franchise agreement to be “good franchisors” and “good franchisees.”

Saudi Arabia has just adopted a new comprehensive franchise law, the details of which are being set out in regulations. Our educated guess is that the initial regulations will be trying for franchisors.

South Korea has one of the most active franchising markets in the world, but its Fair Trade Commission has been adopting changes to the franchise law almost yearly, each time imposing new burdens and restrictions on franchisors. One example: a franchisor that requires a franchisee to remodel or upgrade its business premises, will be required to pay up to 40 per cent of the expense.

Thailand had just adopted regulations to require franchisors to disclose all material information. Of course, no one knows what that means.

KM: Are there any markets that are largely similar in how franchisors operate, so that a business may choose to easily grow from one to the other?

CZ: People and regulations are more similar than not, regardless of where they are. However, a potentially fatal mistake that franchisors do make, is to assume that conditions and laws are the same as the ones that they have experienced in their home countries.

We often advise U.S. franchisors to consider Canada as a first international territory. It is truly different and will help the franchisors to learn about cultural and legal differences, but provide the advantages of proximity and a common language and similar legal system (except for Quebec).

Global Franchise Meets.

An inspirational new web video series where we meet the business leaders and influencers in International Franchising.

you may be interested in

franchise directory

  • TaxAssist Accountants

    Business & Professional Services, Financial Services, <100K, Featured

  • Cafe2U

    Food & Catering, Coffee, Take-away, <100K, Featured

  • 800 Pizza

    Food & Catering, Fastfood, Pizza, Take-away, Featured

view more
Connect with Linkedin Logo
Global White Logo Click Here
Close button

WHAT DO WE USE YOUR INFORMATION FOR?

Any of the information we collect from you may be used in one of the following ways: To personalize your experience (your information helps us to better respond to your individual needs) To improve our website (we continually strive to improve our website offerings based on the information and feedback we receive from you) To improve customer service (your information helps us to more effectively respond to your customer service requests and support needs) To process transactions your information, whether public or private, will not be sold, exchanged, transferred, or given to any other company for any reason whatsoever, without your consent, other than for the express purpose of delivering the purchased product or service requested. To administer a contest, promotion, survey or other site feature To send periodic emails The email address you provide for order processing, will only be used to send you information and updates pertaining to your order. Note: If at any time you would like to unsubscribe from receiving future emails, we include detailed unsubscribe instructions at the bottom of each email.

HOW DO WE PROTECT YOUR INFORMATION?

We implement a variety of security measures to maintain the safety of your personal information when you place an order or enter, submit, or access your personal information We offer the use of a secure server. All supplied sensitive/credit information is transmitted via Secure Socket Layer (SSL) technology and then encrypted into our Payment gateway providers database only to be accessible by those authorized with special access rights to such systems, and are required to keep the information confidential. After a transaction, your private information (credit cards, social security numbers, financials, etc.) will not be stored on our servers.

DO WE USE COOKIES?

Yes (Cookies are small files that a site or its service provider transfers to your computers hard drive through your Web browser (if you allow) that enables the sites or service providers systems to recognize your browser and capture and remember certain information. We use cookies to help us remember and process the items in your shopping cart, understand and save your preferences for future visits, keep track of advertisements and compile aggregate data about site traffic and site interaction so that we can offer better site experiences and tools in the future. We may contract with third-party service providers to assist us in better understanding our site visitors. These service providers are not permitted to use the information collected on our behalf except to help us conduct and improve our business.

DO WE DISCLOSE ANY INFORMATION TO OUTSIDE PARTIES?

We do not sell, trade, or otherwise transfer to outside parties your personally identifiable information. This does not include trusted third parties who assist us in operating our website, conducting our business, or servicing you, so long as those parties agree to keep this information confidential. We may also release your information when we believe release is appropriate to comply with the law, enforce our site policies, or protect ours or others rights, property, or safety. However, non-personally identifiable visitor information may be provided to other parties for marketing, advertising, or other uses.

THIRD PARTY LINKS

Occasionally, at our discretion, we may include or offer third party products or services on our website. These third party sites have separate and independent privacy policies. We therefore have no responsibility or liability for the content and activities of these linked sites. Nonetheless, we seek to protect the integrity of our site and welcome any feedback about these sites.

CHILDRENS ONLINE PRIVACY PROTECTION ACT COMPLIANCE

We are in compliance with the requirements of COPPA (Childrens Online Privacy Protection Act), we do not collect any information from anyone under 13 years of age. Our website, products and services are all directed to people who are at least 13 years old or older.

ONLINE PRIVACY POLICY ONLY

This online privacy policy applies only to information collected through our website and not to information collected offline.

TERMS AND CONDITIONS

Please also visit our Terms and Conditions section establishing the use, disclaimers, and limitations of liability governing the use of our website at globalfranchisemagazine.com/terms-conditions

YOUR CONSENT

By using our site, you consent to our online privacy policy.

CHANGES TO OUR PRIVACY POLICY

If we decide to change our privacy policy, we will post those changes on this page

CONTACTING US

If there are any questions regarding this privacy policy you may contact us using the information below. All correspondence relating to the Website should be sent to: Global Franchise 21/23 Phoenix Court Hawkins Road Colchester Essex CO2 8JY Email: subscriptions@aceville.co.uk