With a lot of attention to detail and knowledge of local laws, you can also develop an international franchise master contract to build your global franchise empire. The main obligations of the delegate to the territory are the evaluation, reduction and obtaining of potential candidates to the franchisor and the provision of certain services to franchisees in its designated territory, such as training, site selection, support for openness and ongoing support. As a result, franchise agreements are entered into directly between the franchisor and each franchisee. The territorial agent often receives a portion (fixed amount) for each franchised unit opened on its territory and is often entitled to a portion of the franchise fees (fixed percentage) collected for each franchise of the unit opened on its territory. The relationship between the franchisor and the representative of the territory is governed by an international commercial contract. You will find this type of contract in several languages in the following links: Here are some resources that guide you in the field of international franchising. Foreign masters holders pay hefty pre-fee fees to acquire a given geographic area or, in some cases, an entire country where they operate as mini-franchises or sub-franchises, sell franchises, collect royalties, train owners and monitor all other related issues. You can even open units yourself. Generally speaking, a number of deductibles must be declared for the exclusive right to use the business model in an entire country. It is understandable that franchisors generally hope for the best, but they must plan for the worst.
The reality is that watching the „end of the game“ at the beginning of the relationship is absolutely crucial. There is a need for a tailored approach to in-depth analysis of the range of likely potential outcomes and alternative approaches in cases where the relationship is noticed and the franchisee violates the agreement. Once the franchisor has defined the rights it should have to review, terminate or license the franchisee, these mechanisms should be tested in the regulatory context of the foreign jurisdiction. At a time when regulation and litigation are being strengthened, franchisors should not simply rely on standard rules on non-compliance and termination. All franchise laws, relationship laws, the principles of violation and termination, and non-competitors must be respected. Recently, in Canada, a competition protection pact was not upheld by the court – not because of issues relating to the timing or territorial scope of the provisions – but because the franchisor did not intend to replace the franchisee in that area was established and it was therefore established that the franchisor did not have sufficient ownership interest to protect the area concerned. which required the Tribunal to enforce the competition agreement. These are just some of the often overlooked thinking that should be given special attention when developing and negotiating international franchise agreements – helping franchisors create robust systems. This section describes the exclusive territory or territory granted to the franchisee.
Finally, it should be noted that, in the development of an international franchise agreement, the main objective is to strike the right balance between the interests of the franchisor and those of the franchisee, taking into account the essential obligations of the contract.