Is it possible to have a uniform set of franchise laws around the world?
In early March 2015, franchising law expert Philip Zeidman of global law firm DLA Piper spared us some time in his very busy schedule to answer a few questions about the current landscape of international franchising, and what franchisors should do when expanding beyond their home borders.
What are some countries that are receptive to U.S. franchises that may not be people's radar like the UK, France, and the BRIC countries have been?
That’s a risky speculation, and can change rapidly. The guide which most U.S. companies use is projected rate of growth. But for a country to be appealing to franchisors one must also look for such earmarks as a growing middle class, increasing receptivity to western goods and services, transparency and minimal corruption.
Take a look at some countries which have been relatively under the radar. In our own region, Chile, Colombia, and Peru. In Asia, Thailand, the Philippines, and Indonesia despite some degree of struggling to loosen the constraining regulations; and, of course, much of the Middle East. But I emphasize that much of this could change.
There has been some talk about harmonizing U.S. and European franchise laws (possibly allowing the United States’ Franchise Disclosure Document/Franchise Agreement to be used overseas). Do you think this will happen eventually and what would be the steps in making it a reality?
Regrettably, I see no realistic possibility of this happening in the foreseeable future, if ever. The history of efforts to create “uniform” multinational franchise laws has been a bleak one.
The most concerted effort was by The International Institute for the Unification of Private Law (UNIDROIT), which has been largely ignored, and other initiatives have been no more successful. National prides remain strong, and, while it is widely acknowledged that the U.S. laws were the foundation of most other countries’ laws, there is certainly no evidence of those countries embracing the U.S. format. But, because there are strong similarities among a number of laws. An informed franchise attorney can guide a franchisor to avoid having to reinvent the wheel in every country.
What goes into a franchisor protecting its brand when it expands to another country?
The franchisor will need to consider, at a minimum, which marks should be considered for searching and filing; in which countries the searches will be conducted and the applications filed; and the classes in which the applications for each mark will be filed.
Because this can quickly become expensive, it is essential that franchisors prioritize (what markets are most important? Most expensive? Most vulnerable to trademark piracy?). It must be emphasized that that this is work for an experienced trademark lawyer (and, unless you use a law firm with offices around the world, another firm in the target market). But there is no task which should take precedence over protecting your marks.