Some degree of subjectivity is highly needed when it comes to cultural norms of a country. But, this rule is not valid in case of laws. Some serious problem like a decrease in sales may happen if a cultural faux pas occurs. This may happen because of not following the local laws properly. Not only international franchises are in danger, but also an entire business with the brand can be at a great risk if a violation of International laws happens.
As we all know, Franchise Laws and agreements usually function outside the territory of traditional business models. In countries other than parent country, there is a vast difference in business models. Here are some common examples from International Franchise Association to show how international franchises laws of countries differ:
- As compared to the US, the period of disclosure acknowledgment and “cooling off” is a little longer in Australia.
- In case of Brazil, the franchise agreement must be translated into Portuguese and is then getting registered with Brazilian Patent and Trade Office.
- For terminating the franchise agreement in Mexico, there are special conditions to do so.
- Spain applies special registration laws to franchises.
Businesses who are interested in further expansion to new territories can first do a quick check on the franchising laws of that country. It is worth to note that states of the US have their own specific franchise laws. When it comes to international franchising, it is always good for the franchisors to ensure their legal team has a good knowledge of franchise laws and international trade.
In addition to this, franchisors must ensure international franchisees are expanding their business by following the industry-proven business model. While international franchising laws will emphasize on funding, business structure, and trade. To be successful in business, every franchisee will also have to sternly follow local laws and ordinances of its area.
This post first appeared on Master Franchisees: Benefits You Must Consider – Franchiselawus, please read the originial post: here