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Vol 2 (2004) - Issue 6

Stranger in a strange land: Contrasting franchising alternatives in international franchising

W Andrew Scott, Partner, Paul Hastings Janofsky & Walker LLP, Atlanta, Georgia and Chris Wormald, Partner, Eversheds LLP, London

This article discusses the factors that affect the selection of an appropriate structure for international expansion programmes and contrasts issues that arise during the negotiation of area development programmes and master franchises. It then addresses issues that arise during the term of the franchise relationship and contrast the differences between area development programmes and master franchises that the franchisor will encounter in its day-to-day relationship with its foreign franchise partner. Finally, it identifies key termination issues for which the franchisor must prepare in the event that its relationship with its franchise partner experiences difficulties, and analyses differences in those issues between area development programmes and master franchises.

New Brazilian Civil Code and its impact on franchising

Cândida Ribeiro Caffé, Dannermann Siemsen Bigler & Ipanema Moreira, Rio de Janeiro

Brazil’s new Civil Code came into effect in January 2002 and establishes important legal guidelines relating to private rights. Although it does not expressly mention franchising, it prescribes general rules and principles, which also have to be observed in franchising legal documents. Thus, franchising and all other private sectors have been indirectly affected by the new Civil Code and will have to adapt their legal documents into the new concepts and spirit of the current Code, with particular reference to: preliminary agreements; statue of limitations; principles of good faith; social purposes of the agreement; excessive burden; and unlimited agreements.

Franchising in the Czech Republic

Pavel Marc,Wolf Theiss, Attorneys-at-Law, Prague

This article outlines the legal and regulatory framework of franchising as a method of doing business in the Czech Republic, with particular focus on the law applicable to commercial contracts and competition law.

EC Automobile Block Exemption Regulation and its Possible Impact on Certain Franchise Industries in the Automotive Sector

Albrecht Schulz, Partner, CMS Hasche Sigle, Stuttgart

The European Commission adopted a new Block Exemption Regulation for the Motor Vehicle Sector No 1400/2002 on 31 July 2002 which is valid until 31 May 2010. The main range of application of the Automobile BER remains the distribution of new automobiles, but according to Art 2(1), the new Automobile BER applies also to vertical agreements for the purchase, sale and resale of ‘spare parts for motor vehicles’ or of ‘repair and maintenance services’. This is independent of whether the spare part distribution or the repair and maintenance network are part of an automobile distribution network or not. This is the main difference to the old Automobile BER which covered spare part distribution and repair and maintenance services only when they were part of new motor vehicle distribution.

US Report December 2004

Lauren J Murov, Piper Rudnick LLP, Chicago

In a recent case, the District Court for the Northern District of Illinois addressed the issue of whether a United States court can refuse to recognise an arbitration award granted in Poland on the ground that recognition and enforcement of the award would be contrary to the public policy of the United States solely because the Polish arbitrator might have made a mistake of law or fact.

EU Report December 2004

James Webber, Eversheds LLP, Brussels

An update on recent ECJ case law in the areas of competition and intellectual property.