The Importance of Hiring an Experienced International Attorney, Part 1
Legal fees can add up when registering trademarks, preparing franchise agreements, and satisfying legal requirements. Contrary to popular belief, the U.S. isn't the only country heavy with franchise laws. Other countries also have similar laws requiring a franchisor to provide a disclosure document to the prospective franchisee and, in some cases, make filings with the local government authorities. Even if a disclosure document isn't required in the country you are entering, smart prospects used to evaluating U.S. brands will likely ask for one, so be prepared.
Failure to meet the legal requirements required by the country in which you want to expand and under your franchise agreement — including requirements related to disclosure requirements, withholding taxes, relationship laws, currency exchange restrictions, letters of credit, and dispute resolution — is easily avoidable if you get advice on your choices and how to navigate the legal environment from a qualified and experienced international franchise attorney. Some of the ways you approach many of these issues may be different from how you handle them in the U.S., but some will be similar or the same.
Besides understanding U.S. and foreign legal requirements, attorneys experienced in international franchise law understand the nuances of how the laws are applied in each jurisdiction and can point out the traps you can inadvertently fall into — even when you think you understand that country's laws. When you are ready to cut a deal, you want to be able to move quickly.
If your current attorney is a novice in this area, you should request that they refer you to an international franchise lawyer with expertise in international franchise transactions. Experienced international franchise attorneys, both in the U.S. and in the local markets you are planning on entering — along with business consultants knowledgeable about international commerce — can save you time and money in getting the deal done correctly.
Many U.S. attorneys and consultants use a network of lawyers and consultants internationally that they respect and can also recommend to you. Here are a few good sources:
- The International Franchise Association's (IFA) Supplier Forum.
- The American Bar Association's (ABA) Forum on Franchising can provide you with information on attorneys who specialize in international franchise law.
- The International Bar Association (IBA), based in London, has an International Franchising Committee with more than 600 members from 78 countries who regularly work in international franchising.
- Who's Who Legal, published by Law Business Research, can be used to search for lawyers specializing in franchise law around the world.
This is an excerpt from the book Franchise Management for Dummies by Michael Seid and Joyce Mazero.
Joyce Mazero, a shareholder with Polsinelli PC, a law firm with more than 875 attorneys in 22 offices, is co-chair of its Global Franchise and Supply Network practice. Contact her at 214-661-5521 or email@example.com. Michael Seid is managing director at MSA Worldwide. Contact him at 860-523-4257 or firstname.lastname@example.org.
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