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How should franchisors work with micro-influencers? – A review of English law

Craig Giles and Georgie Twigg, Bird & Bird, London, UK

Influencer marketing has become a big business. Many franchisors regularly compete to capture the attentions of celebrities and social media stars and attracting the right endorsement can lead to significant marketing exposure. However, a new breed of social media star is now is stepping into the spotlight – the micro-influencer – and, in order to deliver value to their franchisees, franchisors need to understand how to deal with them.

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Publication date:

July 2019

Recent developments in franchising in New Zealand

Stewart Germann, Stewart Germann Law Office, Auckland, New Zealand

New Zealand does not have any franchise-specific legislation. However, for members of the Franchise Association of New Zealand (FANZ) and for non-members who may choose to do so, there is a Code of Practice and Code of Ethics which must be complied with. There are also robust laws to protect important franchising principles.

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Publication date:

May 2019

Resale prices in franchise chains: A lawyer perspective

Dr. Rozenn Perrigot, Graduate School of Management (IGR-IAE Rennes), University of Rennes 1, Rennes, France, Dr. Guy Basset, Graduate School of Management (IGR-IAE Rennes), University of Rennes 1, Rennes, France, Dr. Begoña López-Fernández, Facultad de Economía y Empresa, University of Oviedo, Oviedo, Spain, and Dr. Anna Watson, Hertfordshire Business School, University of Hertfordshire, Hatfield, UK

Franchisees do not have complete independence, but they must have a certain degree of freedom, including in relation to setting resale prices. Franchisors can recommend prices to their franchisees or even impose maximum resale prices, but they do not have the right to to impose a fixed or a minimum resale price. This article explores the issue of resale prices based on a study involving lawyers from France, Italy, Spain and the United Kingdom, who specialise in contract law, competition law and/or distribution law. The authors address the practice as well as the law in relation to pricing policy in franchise chains.

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Publication date:

December 2018

Real estate issues in franchising internationally

Srijoy Das, Archer & Angel, New Delhi, India, Robyn Hansen, Quarles & Brady LLP , Milwaukee, USA and Robert A. Lauer, Haynes and Boone, LLP, Austin, USA

This paper explores how real estate markets, leasing norms and strategies used to find and secure real estate can vary significantly from country to country around the world, and what is important for any franchisor considering expansion to an international market to take into consideration. The authors consider real estate structuring issues, legal and market factors and franchise agreement provisions.

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September 2018

How Australia’s franchising regulator establishes its enforcement priorities

Michael T. Schaper, Ph.D., Deputy Chairman, Australian Competition & Consumer Commission and Adjunct Professor, Western Sydney University, Canberra, Australia

This article outlines the system used by one national regulator of franchising, the Australian Competition & Consumer Commission, to develop its annual enforcement, litigation and education-related priorities in the sector. The author explains how those priorities are established, the current and past priorities of especial interest to the franchising community, and the utility of developing such a process.

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Publication date:

July 2018

Legal and regulatory concerns raised by franchisees: some preliminary Australian evidence

Michael T. Schaper, Ph.D., Deputy Chairman, Australian Competition & Consumer Commission; Adjunct Professor, John Curtin Institute of Public Policy, Curtin University, Western Australia

Few franchising regulators compile or publish statistics on franchisee complaints and enquiries. Using data collected over four years, this article briefly outlines the contacts which the national franchising regulator in Australia (the Australian Competition & Consumer Commission) receives from franchisees, and attempts to identify some characteristics of the franchisees most likely to complain. Complaints and allegations by franchisees about breaches of the law (be it the Competition and Consumer Act, the Australian Consumer Law or the Franchising Code) represent about 70-80% of the contacts received each year, whereas general queries or simple requests for more information account for only 20-30%. The most common complaints are about alleged breaches of the Code; these typically account for 55-75% of complaints received in a given year. This is followed by a lesser number of allegations about breaching the Australian Consumer Law (13-24%); there are also numerous allegations (11-17%) which in fact fall outside the parameters of the laws that the ACCC administers. Most contacts are from micro-sized franchisees, followed by small-sized firms. Contacting franchisees tend to be either newly started (0-2 years old) or relatively mature, well-established operations (5-10 years old). Complaints are relatively equally distributed across different states, closely in line with the overall distribution of both businesses and the general Australian population.*

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December 2016

Anatomy of a franchise dispute: Lessons for transactional lawyers drafting franchising agreements

Francesca R. Turitto, Roma Legal Partners, Rome, Italy, Olivia Gast, Gast Avocats, Paris, France, Eduardo Damião Gonçalves, Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados, São Paulo, Brazil and Craig Tractenberg, Fox Rothschild LLP, New York, USA

This article attempts to distil the secrets of drafting franchise documents in an effort to pre-emptively avoid disputes, bringing together the insights litigators, dispute resolution and transactional lawyers, including lawyers who have been arbitrators in franchise disputes. The authors identify recurrent issues in the franchise relationship which should be addressed by drafting. Recognizing the differences from country to country, state to province, industry to industry, will help transactional lawyers limit the opportunities for disagreement. To the extent that disputes occur, as is inevitable, careful drafting will render the outcomes more predictable. This article aims to identify the risks and the possible drafting techniques to address the risks, and to minimise the chance that certain contractual provisions are unenforceable.

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Publication date:

November 2016

Avoiding common mistakes in international franchising

Carl E. Zwisler, Gray Plant Mooty, Washington, D.C., USA and Beata Krakus, Greensfelder, Hemker & Gale, Chicago, USA

This is the second article in the series “Avoiding Common Mistakes in International Franchising.” In the following pages, the authors continue their discussion of legal and business issues that should be addressed in the plans of international franchise parties, in particular the issue of how the choice of franchising strategy affects the cost and viability of an international franchising transaction.

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Publication date:

September 2016

Structuring joint ventures in franchising

Theodore P. Pearce, Bradley Arant Boult Cummings, Charlotte, USA, María Bacas, formerly Grupo Vips, Madrid, Spain, and Luciana Bassani, Dannemann Siemsen Advogados, Rio de Janeiro, Brazil

Many franchisors choose joint venture structures as the basis for expanding their brand abroad. This article presents an overview of the advantages and disadvantages of using joint ventures for franchise expansion as well as a detailed analysis of contractual and intellectual property considerations.

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Publication date:

September 2016

Joint liabilities for franchisors: employment, vicarious liability, statutory and other liabilities

Michael Brennan, DLA Piper LLP (US), Chicago, US, Babette Märzheuser-Wood, Dentons UKMEA LLP, London, UK, Raphaël Mellerio, Aramis Avocats, Paris, France, Martin Reufels, Heuking Kühn Lüer Wojtek, Köln, Germany and Francesca R. Turitto, Roma Legal Partners, Rome, Italy

One of the main principles of a franchising relationship is that the franchisee is a legally independent operator, running its business at its own risk and peril and assuming the commercial risks of its own decisions. Franchisees are however economically dependent on the franchisor’s methods and know-how of the franchisor whose control over the franchise system and the franchisees is an area of caution. Third parties may argue that the franchisor controls the franchisee to the point of holding the franchisor accountable for the franchisee’s actions. This article focuses on the vicarious liability of the franchisor vis-à-vis the franchisee’s employees and the different approaches in France, Germany, the United Kingdom and the United States to the issue of joint employment in the context of a franchisor/franchisee relationship.

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Publication date:

February 2016

What is the liability of Canadian franchisors as potential “joint employers”?

Jean-Marc Leclerc and Krishana Persaud, Sotos LLP

In light of recent developments in the United States in relation to the standard for determining joint employer status, this article considers the risk that similar joint employer principles might be applicable to franchisors in Canada. Based on an analysis of Canadian common law and statutory law, the author concludes that the joint employer situation is clearer in Canada than in the United States. The joint employer tests have remained unchanged for many years, but are still couched in broad language that makes each inquiry very fact-specific.

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Publication date:

February 2016

Structuring European expansion: use of agency, distribution and franchising arrangements

Karsten Metzlaff, Noerr LLP, Berlin, Germany, Monika Essers, Busch Essers Rechtsanwälte, Cologne, Germany, Edward Miller, Reed Smith, London, UK and Donald P. Wray, Jr., Little Caesar Enterprises Inc., Detroit, USA

When running a successful distribution system, many enterprises seek to expand and to distribute their goods and services not only in the home country of the distribution system but also in foreign countries. This article provides an overview of the legal frameworks which have to be taken into consideration when structuring expansion by the use of agency, distribution and franchising arrangements in Europe.

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Publication date:

February 2016

International mergers and acquisitions of franchise companies

Jeffrey A. Brimer, Alexius, LLC, Denver, USA, Beata Krakus, Greensfelder, Hemker & Gale, P.C., Chicago, USA and Gilles Menguy, GM Avocats, Paris, France

This article analyses the format, due diligence considerations and risk factors in relation to international M&A transactions in the franchising sector. The formats considered include a franchisor acquiring its foreign master or unit franchisee, a franchisor acquiring a foreign competitor franchise company and private equity acquiring a foreign franchise company. The international nature of the transaction results in specific due diligence requirements as regards intellectual property rights, disclosure and registration compliance and relationships with foreign franchisees. The authors finally consider the risks inherent in off balance sheet information, change mismanagement and the potential negative impact on franchisees.

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Publication date:

October 2015

Tax issues in international franchising

Tao Xu, DLA Piper LLP, Reston, USA, Kenneth S. Levinson, Faegre Baker Daniels LLP, Minneapolis, USA, Edward Levitt, Dickinson Wright LLP, Toronto, Canada and Hans van Walsem, Loyens & Loeff, New York , USA

International tax is a key element to consider when planning on franchising abroad. This article considers the many complex, and at times apparently inconsistent rules and structuring considerations affecting wishing to expand their brand abroad, with a particular focus on US outbound franchising. The analysis covers the application of double taxation rules in tax treaties, the crucial concepts of permanent establishment and transfer pricing, and the impact of withholding taxes. The authors also discuss a number of practical tax planning structures which can be employed by international franchisors.

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Publication date:

September 2015

Online sales and competition law controls

Richard Eccles, Bird & Bird LLP, London, United Kingdom

Many franchisors may welcome the use of the internet by their franchisees as a means of reaching a wider range of customers and increasing sales revenue. Others may wish to control or limit the extent or way in which their franchisees use the internet. In either case, EU and UK competition rules impose strict limits on the extent to which a supplier can prevent its franchisees and other retailers from selling the franchise or contract products online. Both franchisors and franchisees need to know the extent to which restrictions on online selling infringe the rules. A franchisor should avoid a situation in which restrictive clauses in the franchise agreement are not valid or enforceable against franchisees.

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Publication date:

June 2015

Government regulation of franchising, licensing, and distribution in Asia – too much, too little, or just right?

Jeffrey A. Brimer, Law Office of Jeffrey A. Brimer, LLC, Denver, USA, Mai Thi Minh Hang, Russin & Vecchi, Hanoi, Vietnam, Terry Kim, Lee & Ko, Seoul, Korea, Etsuko Hara, Anderson Mori & Tomotsune, Tokyo, Japan, S. F. Wong, Shearn Delamore & Co., Kuala Lumpur, Malaysia, Nadia Harto, Herbert Smith Freehills LLP in association with Hiswara Bunjamin & Tandjung, Jakarta, Indonesia, Philip F. Zeidman, DLA Piper LLP (US), Washington, DC USA

There is more regulation of franchising, licensing, and distribution sales and relationships in Asia than in any other continent. This article surveys and compares the laws and regulations that apply to franchising, licensing and distribution relationships under franchise and related laws in The People’s Republic of China, Indonesia, Japan, The Republic of Korea, Malaysia and Vietnam. The authors discuss the breadth and impact of these laws on franchisors, licensors and others; the extent to which there is over-regulation; and, techniques for dealing with these laws. The information and issues are presented in a thematic question and answer format for ease of comparison.

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Publication date:

June 2015

A marriage made in heaven? Private equity and international franchising

Francesca R. Turitto, Roma Legal Partners, Rome, Italy, Luciana Bassani, Dannemann Siemsen Advogados, Rio de Janeiro, Brazil, Dominic Hui, Ribeiro Hui, Shanghai, China, David W. Koch, Plave Koch PLC, Reston, USA and Sajai Singh, J. Sagar Associates, Bangalore, India

Franchises tend to have well-developed brands, predictable and recurring revenue streams and modest capital expenditure needs, making them special targets for many private equity firms who continue to invest not only in franchisors, but also in their master franchisees and multi-unit operators in other countries. This article provides an overview of the private equity market in recent years, with a focus on Asia and South America. It analyses various business, financial and legal aspects of PE deals in the franchising sector from the point of view of PE funds and franchisors, including the role and drivers for the investment, timing of the investment, preparation and organisation of the transaction, and challenges during and after the transaction.

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Publication date:

February 2015

Encroachment issues around the world

Rocío Belda de Mergelina, Garrigues SLP, Madrid, Spain, Eric H. Karp, Witmer, Karp, Warner & Ryan, LLP, Boston, USA and Ted P. Pearce, Nexsen Pruet, PLLC, Charlotte, USA

Encroachment can occur when a franchisor, through company-owned outlets or by granting other franchises, competes in the same market with an existing franchisee’s business, often leading to disputes between franchisors and franchisees. Most franchise systems accord franchisees some form of protected area in which it will be secure against competition from a similar branded outlet for a period of time. In the franchise agreement, the grant of a protected territory is usually followed by the reservation of rights provision. This article analyses the law and case law in various countries around the world in relation to territorial exclusivity and reservation of rights with a particular focus on franchise specific disclosure regulations, competition law, contract law and the concept of good faith. Franchisors focused on expanding their systems in other markets must understand the relevant legal frameworks in order to grapple with the intricacies of territorial development and the consequences of encroachment.

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February 2015

Australia – Regulatory reform and case law update

Andrew Wiseman and Julia Kovarsky, Allens, Sydney, Australia

Franchising law received a lot of attention in Australia in 2014. While Parliament has been busy considering and drafting regulatory reform, the Courts have been equally active in scrutinising franchising relationships. The new Australian Franchising Code of Conduct introduces new civil penalties, an express obligation of good faith, rules in relation to marketing funds and capital expenditure, new disclosure and record keeping obligations, amended dispute resolution rules and restrictions on restraint of trade rules. The Government also published a consultation paper on extending unfair contract term protections to small businesses. The author also considers three recent Federal Court decisions considering the duties of parties in a franchising relationship.

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Publication date:

December 2014

Post expiration and termination issues in master franchising – the fate of the unit franchises and other issues

Leonard Polsky, Gowling Lafleur Henderson LLP, Vancouver, Canada, Mark Abell, Bird & Bird, London, UK, Ruby Asturias, Pacheco Coto, Guatemala City, Guatemala and Sun Chang, Lee & Ko, Seoul, Korea

What is the fate of the unit franchises once the master franchise expires or terminates? This article explores the consequences of expiration or termination of a master franchise agreement, under both common law and civil law, in various jurisdictions across Europe, Asia and Latin America. The analysis focuses on the relevant issues for each particular region, such as termination of unit franchises, reversion of the master franchise, assignment of the unit franchise agreements, ancillary agreements such as subleases, ongoing support, brand names, re branding, local law, and others, that are important to the fate of the unit franchises.

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Publication date:

November 2014

Internet issues in international franchising

Corinne Attard, Holman Webb, Sydney, Australia, Michael Lindsey, Steinbrecher & Span LLP, Los Angeles, USA, Karsten Metzlaff, Noerr LLP Berlin, Germany and John Pratt, Hamilton Pratt, Warwick, UK

The internet has developed into a significant force in the marketing and distribution of goods services. Franchisors wishing to harness this “disruptive innovation” for the benefit of the entire franchise system often want to impose controls on use of the internet by franchisees. This article covers a number of such controls available to franchisors and considers to what extent they are subject to legal and administrative restrictions with a particular focus on Australia, Europe and the US. The authors discuss direct and indirect prohibitions on online sales, quality restrictions, specifications to support the brick and mortar shop, obligation to use the franchisor’s central website and online sales by franchisors. Their detailed analysis of a fast moving area of law clearly demonstrates that franchisors should take advice before imposing controls on franchisees’ internet sales and should remain attentive to developments.

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Publication date:

September 2014

The duty of good faith in franchise agreements – a comparative study of the civil and common law approaches in the EU

Dr Mark Abell and Victoria Hobbs, Bird & Bird, London, UK

This article considers how the duty of good faith impacts on the on-going relationship between franchisor and franchisee in the civil and common law traditions. The concept of good faith is firmly established in the civil law jurisdictions of the EU, particularly in German and French law, but it manifests itself in different forms in each of them. In English law, the idea that good faith is not part of business-to-business contracting is now outdated. Recent English case law confirms that an implied concept of good faith is steadily gaining recognition as a legally binding concept during the performance phase of contracts particularly long term relational agreements such as franchise agreements.

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Publication date:

February 2014

Entering the U.S. franchise market: A summary of legal considerations

Susan Grueneberg, Partner, Snell & Wilmer L.L.P., Los Angeles, USA

Franchisors that have developed successful programs in their home countries will frequently consider expansion opportunities in other countries. In the past, the United States was not necessarily an attractive venue in light of the high degree of regulation of franchising. Increasingly, other countries have adopted laws governing the offer and sale of franchises and businesses and their counsel have become more comfortable navigating through disclosure and registration requirements. This article describes some of the steps a franchisor must take in preparing to enter the U.S. market, complying with U.S. franchise laws and managing the issues that will typically arise in the process.

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Publication date:

June 2013

Key issues when advising master franchisees and area developers (and franchisors)

Ronald Gardner, Dady & Gardner, P.A., Minneapolis, USA, Ann Hurwitz, Baker Botts LLP, Dallas, USA, Francesca R. Turitto, Studio Legale Roma Lepri & Partners, Rome, Italy and Larry Weinberg, Cassels Brock & Blackwell LLP, Toronto, Canada

Franchisors can expand their operations internationally either through direct franchising or through establishing master franchise or area development agreements. This article provides an in-depth analysis of the legal and commercial issues franchisors, master franchisees and area developers must consider when planning and transitioning into and out of these agreements. The authors discuss a comprehensive range of factors affecting the pre-contractual phase, the contract negotiations, disputes between the parties and termination of the agreement.

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Publication date:

June 2013

Franchising in Africa

Kendal H. Tyre, Nixon Peabody LLP, Washington, D.C., USA

Franchising in Africa has experienced phenomenal growth in recent years. This growth is likely to continue as legislative and economic reforms take hold and Western franchisors and others look to new markets to expand after years of declining growth in their own domestic markets. The franchising concept and franchise legislation are relatively new in Africa. A variety of regulatory frameworks as well as different substantive and formal requirements exist. This article considers the current state of the African franchising sector and considers in detail the law and regulation applicable to franchising in Angola, Nigeria and Tunisia.

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April 2013

Five years after Leegin, can franchisors safely establish resale price maintenance programs?

Kevin M. Shelley, Kaufmann Gildin Robbins & Oppenheim LLP, New York, USA

Until recently, franchisors were forbidden by U.S. federal antitrust law from compelling their franchisees to offer products or services at a predetermined retail price. But the law has changed and “price point advertising” – advertising a product or service for sale at a unitary price at every outlet nationwide – has become a cornerstone of many national franchisors’ advertising message. This article examines whether the changes brought about by the Leegin case are sufficient to allow a franchisor to join the growing number of franchisors implementing resale price maintenance programs. The author concludes that franchisors must closely examine the relevant case law, take account of applicable state antitrust laws, and amend their franchise agreements to reserve the right to impose minimum or maximum retail prices upon their franchisees.

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April 2013

Australia: Recent trends and current issues

Michael T. Schaper, Deputy Chairman, Australian Competition & Consumer Commission; Adjunct Professor, School of Management, Curtin University, Western Australia and Jason Gehrke, Director, Franchise Advisory Centre; Adjunct Lecturer, Griffith University Business School, Queensland, Australia; Deputy Chairman, Franchise Council of Australia

The Australian franchising sector consists of almost 1,200 different franchise systems and some 73,000 individual franchisee units. Since 1998, a mandatory national industry code of practice, the Franchising Code of Conduct, has spelt out certain prescribed minimum standards of information disclosure, dispute resolution and associated issues. Franchising is also subject to the Competition and Consumer Act. Both of these laws are enforced by the Australian Competition and Consumer Commission, which also has responsibility for educating the sector. This article broadly outlines the current state of Australian franchising, explains the key elements of both the Code and Act that are relevant to franchise systems, and gives a brief overview of the ACCC's enforcement and education work in the sector. It concludes by discussing some recent developments, including the introduction of Small Business Commissioners, possible pecuniary penalties for breaches of the Franchising Code, state-based franchising laws, and increasing international linkages between franchising regulators.

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Publication date:

January 2013

Alternatives to master franchising: Area development agreements, area representatives and joint ventures

Kathie Lee, Le Pain Quotidien, New York, USA; Judith Jarvis, Vantage Hospitality Group, Inc., Coral Springs, USA; Shivendra Kundra, Kundra and Bansal, New Delhi, India; Bachir Mihoubi, FranCounsel Group, LLC, Atlanta, USA, and; Susan Grueneberg, Snell & Wilmer, L.L.P., Los Angeles, USA

This article provides a comprehensive analysis of international franchising structures – direct franchising, exclusive master licenses, área development agreements, área representatives, joint ventures and hybrid arrangements – and discusses their characteristics, advantages and disadvantages. The authors discuss the various factors to consider in evaluating these stuctures and discuss the relevant practical, cultural and legal considerations in cross-border expansion. The legal issues include sanctions laws, anti-bribery laws, dispute resolution, intellectual property, recordation and the nature of the franchisors’ relationship with their franchisees depending on the chosen structure.

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September 2012

Franchising under Regulation 330/2010 on Vertical Restraints

Professor Aldo Frignani, Frignani & Associati Studio Legale, Turin

This article provides a detailed and expert analysis of the European Commission block exemption regulation on vertical restraints. It considers the new provisions introduced by the regulation and the accompanying guidelines, in particular those which directly impact on franchising, in relation to know how, resale price maintenance and online sales. The author concludes that franchising contracts should take advantage of the modest improvements the new framework offers, but criticizes the excessive use of guidelines and the resulting lack of certainty.

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November 2011

Avoiding and managing system-wide litigation in international franchising

Mark Abell, Partner, Field Fisher Waterhouse LLP, London; Michael R. Daigle, Partner, Cheng Cohen LLC, Chicago, and; Michael J. Lockerby, Partner, Foley & Lardner LLP, Washington, D.C.

Many franchise systems over the years have faced class actions initiated by franchisees or consumers, multiple lawsuits prosecuted in multiple jurisdictions by disgruntled franchisees, and even administrative proceedings. Class actions certainly seem to have become more common in the United States. This paper addresses in detail how disputes with multiple franchisees across international borders can be managed or avoided. The authors also examine whether class actions in litigation or arbitration will become more prevalent, including in international disputes.

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September 2010

Maximum price setting and new franchise legislation in North Carolina

David W. Oppenheim, Partner and Felicia A. Nadborny, Associate, Kaufmann Gildin Robbins & Oppenheim LLP, New York

A recent case involving Burger King and its franchisees highlights the tension that exists when a franchisor imposes an obligation on its franchisees that is not necessarily aligned with the franchisees’ financial interests. In this particular case the court affirmed Burger King’s right to impose maximum prices on products sold by its franchisees. This Report further provides an overview of new franchise legislation under consideration in North Carolina. The proposals would introduce a range of compliance obligations for franchisors and have met with stark opposition from the franchise community.

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July 2010

Selling franchises in a troubled economy

David W. Oppenheim, Partner and Felicia A. Nadborny, Associate, Kaufmann Gildin Robbins & Oppenheim LLP, New York

The lack of available financing for franchisees in the wake of the economic downturn has led to increased competition between franchisors for a smaller pool of qualified franchisees. International franchisors employing sales strategies in the United States need to be aware of the common law and federal and state franchise law governing the making of pre-sale representations during the sales process. This article considers troublesome pre-sale representations and tips for franchisors to avoid liability stemming from those representations in light of three recent cases.

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Publication date:

September 2009

EU report – Competition update

Cathy McKenna, Associate, Field Fisher Waterhouse LLP, London

A summary of recent developments in European Union competition law and enforcement regarding dominant undertakings, merger control and the new Vertical Agreements Block Exemption.

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Publication date:

July 2009

Can franchisors set minimum resale prices in a post-Leegin world?

David W. Oppenheim, Kaufmann Gildin Robbins & Oppenheim LLP, New York

In 2007 the Unites States Supreme Court abandoned the century old prohibition on minimum resale price maintenance. However, franchisors wishing to establish minimum resale prices still need to overcome substantial hurdles as the law in this area remains unsettled at federal and state level.

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Publication date:

June 2009

Exporting your franchise to Canada - Disclosure and beyond

Bruno Floriani and Marvin Liebman, Lapointe Rosenstein, LLP, Montreal

Franchisors seeking to export their franchise systems to Canada must take into account a number of important legal, tax and commercial considerations. This article provides an authoritative overview of the many areas of law which impact on franchising in Canada at both the federal and provincial levels.

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Publication date:

November 2008

Ten things you should know about China’s new antitrust law

Steve Yu & Peter Corne, Eversheds LLP Shanghai

On August 30, 2007, China’s National People’s Congress adopted the Anti-Monopoly Law (“AML”), the first ever comprehensive competition law in the largest emerging market in the world. This was the culmination of 13 years of legislative effort and debate since the first draft of this law was originally conceived. What are the essential of China’s emerging antitrust legal regime? What follows are the ten key things that you should know about this area.

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April 2008

Competition law in India

Preeti Mehta, Messrs Kanga & Co, Mumbai, India

This article provides an overview of antitrust regulation in India following recent amendments to the Competition Act 2002 and, in particular, analyses the application of provisions regarding restrictive trade practices to franchising agreements.

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Publication date:

April 2008

International Sales, Franchising and Product Liability Law Perspectives in the United States, Canada, Europe, Singapore and China

John R. F. Baer, Sonnenschein Nath & Rosenthal LLP, Chicago; Veronica Chen, Vivien Chan & Co, Beijing; Andrew P. Loewinger, Nixon Peabody LLP, Washington, D.C.; Sönke Lund, Monereo, Meyer & Marinel-lo Abogados, Barcelona; Daniel Urbas, Borden Ladner Gervais srl/LLP, Montreal, and; Woon C. Yew, Rodyk & Davidson LLP, Singapore

This article examines the issues which arise if there is the need for a product recall of an article that has been sold and distributed under a worldwide franchise agreement from the perspective of international sales, franchising and product law. It considers issues such as contract terms, warranties, choice of law provisions, the rights and liabilities of the various parties involved in the distribution chain, responsibility for the returned product and managing product disposal, dealing with governmental agencies and statutory notification obligations, managing and addressing consumer rights to compensation, managing customer expectations and dispute resolution.

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Publication date:

February 2008

Entry into the U.S. Market: Agency, distribution or franchising

John R.F. Baer, Sonnenschein Nath & Rosenthal LLP, Chicago, Illinois U.S.A.; John A. Barrett, Jr., University of Toledo,Toledo, Ohio U.S.A.; Gaylen L. Knack, Gray Plant Mooty, Minneapolis, Minnesota, U.S.A.; John E.Young,Warner Norcross & Judd LLP, Southfield, Michigan U.S.A., and; Luiz Henrique O. do Amaral, Dannemann Siemsen Advogados, Rio de Janeiro, Brazil

The focus of this paper is on various methods of entry into the U.S. market. Foreign companies thinking of entering the U.S. market for the first time often are intimidated by the seeming complexity of the U.S. legal system and many are reluctant to enter the U.S. market as a result. Doing business in the U.S. from a legal standpoint is not as difficult as it seems. This paper will discuss the various alternative methods of distribution that a foreign company might explore to sell its goods or services in the U.S.

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Publication date:

February 2007

EU Report - Comments on the European Court of Justice Judgement in Volkswagen

John Grayston, Partner, Eversheds, Brussels

In order to infringe Article 81 (or its equivalents in national competition laws of the EU Member States), it is necessary to show that an anti-competitive agreement between companies has been entered into. Traditionally the European Commission has concluded that where there is an existing commercial agreement between parties, eg a distribution or franchise agreement, it will not be possible to argue that actions which seem to be in breach of Article 81 are merely unilateral acts of eg the principal and do not form part of the overall agreement. In its judgement of 13 July 2006 Volkswagen, the European Court of Justice confirmed that the Commission cannot make such an assumption and that it needs to pay more attention to determining and proving whether apparently unilateral acts in fact involve a bi-lateral agreement.

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January 2007

New competition legislation in Singapore

Gillian Lee, Khattar Wong, Singapore

This article provides an overview and preliminary commentary on the provisions of Singapore’s new Competition Act, and the author concludes that Singapore companies should now set up effective competition law policies involving reviewing agreements and practices to determine the risk of infringement. Notwithstanding that multi-national companies are probably already complying with competition laws in their base countries, the author notes that they should be aware of local deviations and follow the guidelines issued by the Commission once available.

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Publication date:

October 2005

Critical issues in acquiring a master franchise from a foreign franchisor

Alex Konigsberg Q.C., Lapointe Rosenstein, Montreal

The author examines some of the issues that must be taken into account by a franchisee considering acquiring a master franchise from a foreign franchisor and concludes that franchising experience is almost indispensable in order to succeed.

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Publication date:

February 2005

Stranger in a strange land: Contrasting franchising alternatives in international franchising

W Andrew Scott, Partner, Paul Hastings Janofsky & Walker LLP, Atlanta, Georgia and Chris Wormald, Partner, Eversheds LLP, London

This article discusses the factors that affect the selection of an appropriate structure for international expansion programmes and contrasts issues that arise during the negotiation of area development programmes and master franchises. It then addresses issues that arise during the term of the franchise relationship and contrast the differences between area development programmes and master franchises that the franchisor will encounter in its day-to-day relationship with its foreign franchise partner. Finally, it identifies key termination issues for which the franchisor must prepare in the event that its relationship with its franchise partner experiences difficulties, and analyses differences in those issues between area development programmes and master franchises.

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Publication date:

December 2004

International franchise agreements - Research, risk and reward

Frank Zaid, Partner, Osler, Hoskin & Harcourt LLP, Toronto, Ontario

In this feature, Frank Zaid discusses the key legal issues that should be considered by franchisors who intend to expand their operations across international borders. He warns that the factors to be considered in planning, developing, structuring, implementing and enforcing an international franchise programme are extremely complex. After giving a detailed analysis of the key legal terms in international franchise agreements, the article concludes with an appendix which sets out sample international franchise agreement provisions.

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Publication date:

October 2004

Bulk buying and early settlement discounts

Joe Louw, Solicitor, Cape Town

This feature discusses a ruling in favour of the franchisee in a landmark South African judgment on this issue, despite the fact that there was no specific provision in that regard in the franchise agreement. (An as-yet unreported judgment delivered on 7 January 2004 in the High Court of South Africa, Cape of Good Hope Provincial Division: Cancun Trading No.150 CC (plaintiff) and Seven Eleven Corporation (Pty) Ltd (defendant).

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Publication date:

June 2004

International treaties, conventions and agreements affecting franchising

John R. F. Baer, Sonnenschein Nath & Rosenthal LLP, Chicago, Illinois; Dr. Karsten Metslaff, Nörr Stiefenhofer Lutz, Berlin; and Larry Weinberg, Cassels Brock & Blackwell LLP, Toronto, Ontario

Each year, the accessibility of foreign markets continues to increase with the ratification of new international trade agreements. In today’s economy, the importance of being able to diversify a company’s sources of revenue cannot be understated. Franchising is for many the perfect vehicle for entering foreign markets. In order successfully to expand franchise operations in these new markets, an understanding of the complex world of international treaties, conventions and legal agreements is a necessity.

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Publication date:

April 2004

Navigating the competition law minefields

Dr Martin Mendelsohn, Eversheds, London and Alan H. Silberman, Sonnenschein Nath & Rosenthal LLP, Chicago

In this article, based on a paper given at The Increasing Globalization of Franchising, International Bar Association Section on Business Law, International Franchise Association, 19th Annual Conference, Washington, D.C., on May 14–15, 2002, the authors give a detailed explanation and analysis of the application of competition law under both European and US legal systems.

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Publication date:

December 2003

Australia - Section 51AC of the Trade Practices Act - Impact on franchising sector

Cristina Cecere, Piper Alderman, Adelaide

This article considers in detail the commentary on section 51AC of the Australian Trade Practices Act, and by concentrating on the 'franchising' cases under that section, attempts to demonstrate that although its scope is potentially far reaching, section 51AC has not had the level of impact first perceived. This article concludes by exploring (amongst other things) the Franchising Code of Conduct as the main explanation for the less than profound impact section 51AC has had on the franchising sector and suggests ways in which franchisors can in any event minimise the potential risks that section 51AC presents.

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Publication date:

August 2003