Franchising: Country Q&A tool

Search the Country Q&A in the Franchising Global Guide by question and jurisdiction.

Step 1: Check the boxes to select the questions and the jurisdictions for comparison. 
Step 2: Click the "submit" button. 
Step 3: Scroll down to view answers and check law stated dates for each jurisdiction.

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Market

1. What have been the main developments in the franchising market over the past 12 months?
 
2. What are the most commonly used methods of local and international franchising?
 
3. Are there any specific reasons for an overseas franchisor to use a separate entity for entering into a franchise agreement with a franchisee in your jurisdiction?
 

Regulation of franchising

4. What is the legal definition of franchising and/or a franchise?
 
5. What are the laws regulating franchising?
 
6. What is the regulatory authority responsible for enforcing franchising laws and requirements in your jurisdiction?
 
7. Must the franchisor be registered with a professional or regulatory body before setting up a franchise system?
 
8. Is there a code of ethics or other means of promoting ethical franchising in your jurisdiction?
 
9. Do franchisees benefit from any laws designed to protect consumers or small businesses?
 
10. Are there any other requirements which must be met before a business can sell a franchise?
 

Franchise agreement

Pre-contract disclosure requirements

11. Is the franchisor subject to any general or formal pre-contract disclosure requirements?
 
12. Must the franchisor disclose fairly and in good faith all facts material to the prospective franchisee's decision to enter into the arrangement, or must the prospective franchisee rely on its own due diligence?

Formalities

13. What are the formal contractual requirements to create a valid and binding franchise agreement?

Parties' rights and obligations

14. Is there a general obligation to behave fairly, reasonably or in good faith to the other party during the term of the franchise agreement?
 
15. Does local law require that particular provisions must be expressly included in a franchise agreement?
 
16. Are exclusion and entire agreement clauses enforceable in your jurisdiction? If so, are they effective to protect the franchisor?
 
17. Can the franchisor impose product tying or other purchasing restrictions and non-compete obligations on the franchisee during the term of the agreement?

Fees and payments

18. What fees are usually payable by the franchisee? Are there any restrictions on the parties' freedom to set the fees and payments, or any other payment requirements?

Term of agreement and renewal

19. Are parties free to agree on the term of the franchise agreement? What is the typical term of a franchise agreement in your jurisdiction?
 
20. What rights of renewal are usually included in the franchise agreement? Are fees paid on renewal?

Termination

21. Are there any limitations on the right of a franchisor to terminate the agreement?
 
22. Are post-term restrictive covenants enforceable?
 
23. Can the franchisor or a replacement franchisee continue to sell to the former franchisee's customers?

Choice of law and jurisdiction

24. Will local courts recognise a choice of foreign law in a franchise agreement for a business operating in your jurisdiction?
 
25. Will local courts recognise a choice of foreign jurisdiction in a franchise agreement for a business operating in your jurisdiction?
 

Operations Manual

26. How does the franchisor ensure that the franchisee complies with the business standards, systems and requirements?
 
27. Can the franchisor change the Operations Manual unilaterally, as is usually required?
 

Liability issues

28. What are the franchisee's remedies against the franchisor for deceptive or fraudulent selling practices?
 
29. How can third-party claims against the franchisee be brought successfully against the franchisor?
 

Intellectual property

30. What provisions are usually made in relation to intellectual property rights (IPRs), including know-how?
 
31. What are the registration requirements for licensing IPRs?
 

Real estate

32. Are consents from landlords difficult to obtain when transferring leases or granting subleases from a franchisor to a franchisee?
 
33. How can a franchisor prevent the franchisee from occupying the premises after the franchise agreement has ended?
 
34. How can the franchisor effectively acquire the franchisee's premises at the end of the franchise relationship?
 
35. If the franchisor leases or subleases its own site to its franchisee, can it pass on all related costs to the franchisee? Can the franchisor charge its franchisee tenant a rent expressed as a percentage of the franchisee's sales?
 

Competition law

36. What is the effect of competition law rules on franchising agreements? Are there any available exemptions?
 

Employment issues

37. Can a franchisee be regarded as an employee of the franchisor?
 

Dispute resolution

38. How are franchising disputes typically dealt with? What provisions for handling disputes are usually included in domestic franchise agreements?
 
39. How are foreign judgments or foreign arbitral awards enforced locally?
 

Exchange control and withholding

40. Are any exchange control or currency regulations applicable to payments to an overseas franchisor?
 
41. Is there a withholding obligation on payments made to an overseas franchisor?
 

Reform

42. Are there any proposals to reform the laws affecting franchising?
 
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