Franchising into the U.S. from Abroad

Although it is one of the most lucrative franchise markets, relatively few franchisors from outside the U.S. have yet franchised their businesses here. Franchisors often report that their reluctance to come here is based upon myths about the difficulty of complying with various state and federal franchise laws, the risk of litigation from unhappy franchisees, and the high cost of getting started in a competitive market. Changes to the Federal Trade Commission Franchising Rule now make it possible for foreign franchisors to negotiate with prospective U.S. franchisees (in most states) without having to incur the expense of preparing a U.S. franchise agreement and Franchise Disclosure Document.

We guide prospective U.S. franchisors in determining where to offer franchises, franchise structures (master franchising, area development franchising, or unit franchising) which make the most sense for their concepts, and how to cost effectively navigate the requirements of franchise sales laws. We often work with our client’s franchise lawyers and consultants to develop the U.S. version of a company’s franchise program. Because most states do not regulate the sale of franchises, we can help franchisors design franchise programs without incurring the costs and time delays associated with obtaining franchise registrations. When state franchise registrations are required, we help our clients to prepare a single form of disclosure document which (with some state addenda) can be used to satisfy disclosure requirements in all states.

We prepare franchise documents and provide franchise law compliance programs to minimize the likelihood of franchisee disputes and litigation. Only a few franchisors who enter the market and follow our advice are involved in litigation with franchisees.

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