Direct Franchising - Chapter 7 - International Franchising - 3rd Edition

 Originally from: International Franchising - 3rd Edition 

As was previously discussed, a franchisor who decides to franchise directly in a foreign country has three options available to him. This chapter deals with unit franchise agreements within the context of the first two options, namely (i) the franchising of units directly from the franchisor's country and (ii) the establishment of a branch office or subsidiary in the foreign country. Since the entering into of a development agreement is complex and involves the preparation of an agreement that is different from and is in addition to a unit franchise agreement, a later chapter will be devoted entirely to it. 

It should be noted that the use of a foreign subsidiary by the franchisor will be discussed here only within the context of direct franchising. The use of a subsidiary or affiliate of the franchisor within the context of a master franchise agreement will be discussed in a later chapter. It should also be noted that the franchisor for his own particular reasons including tax planning, may want to carry on all of his international franchise arrangements through a separate company from the company which carries on its domestic operations and which may be a subsidiary or affiliate, and which may not necessarily be foreign. The use of such a company for international purposes will impact on the question of ownership of the trade marks as between the franchisor and such company for reasons that will be dealt with later. 

I. INTRODUCTION
II. UNIT FRANCHISE AGREEMENTS
III. BUSINESS CONSIDERATIONS OF DIRECT FRANCHISING WITHIN THE CONTEXT OF INTERNATIONAL FRANCHISING - HOW TO AVOID SOME OF THE PITFALLS
IV. CONCLUSION

  About The Author: 

Alexander S. Konigsberg, Q.C. is Senior Partner, Lapointe Rosenstein (Montreal, Canada) and Former Chairman of Committee X (International Franchising), International Bar Association (1990-1994); Associate Editor, The Journal of International Franchising and Distribution Law (1986- ). Mr. Konigsberg has negotiated international franchise agreements in over 35 countries and has written over 50 legal and business articles on franchising which have been published worldwide.

Mr. Konigsberg was the only non-American who was asked to appear as an expert witness before the US House of Representatives Committee on Small Business in their hearings on franchise legislation in 1990. In addition, in 1996 he was the only non-American to appear before the U.S. Federal Trade Commission in its workshop on the international application of the Federal Franchise Rule. In 1990 he was named "Franchising Personality of the Year" by the Quebéc Franchise Association. In addition, in 1993 he was honored with the Merit Award by the Canadian Franchise Association.