Search Publication

Vol 12 (2014) - Issue 2

Taking the leap: bringing a foreign brand to the United States

John R.F. Baer, Greensfelder, Hemker & Gale, P.C., Chicago, Illinois, United States, Anders Fernlund, NOVA, Stockholm, Sweden, Susan Grueneberg, Snell & Wilmer, L.L.P., Los Angeles, California, United States and Jane W. LaFranchi, Marriott International, Inc., Bethesda, Maryland, United States

Increasingly, franchise concepts that begin in one country soon find that expansion involves not only domestic growth, but also development in other jurisdictions including the United States. Over the past decade, advances in electronic communication have made this type of expansion even easier. This article’s focus is on the challenges a non-U.S. franchisor will face in entering the U.S. market. The authors consider it an interesting exercise to address 20 questions that any non-U.S. franchisor will have as it considers taking the leap and bringing its brand to the U.S. Some of these questions tackle a mix of business and legal considerations; others are primarily focused on legal concerns. The answers reflect the experiences of foreign counsel who has assisted local clients in entering the U.S. market, U.S. counsel who have advised foreign clients interested in the U.S. market, as well as in-house counsel who has worked to bring an acquired foreign brand into the U.S.

The duty of good faith in franchise agreements – Australia and New Zealand

Raynia Theodore, MST Lawyers, Mount Waverley, Victoria, Australia and Stewart Germann, Stewart Germann Law Office, Auckland, New Zealand

This article considers to what extent parties to franchise agreements have a duty to act in good faith under Australian and New Zealand law. In Australia, the courts have not yet unequivocally imposed into all commercial contracts an obligation for parties to act in good faith. In doing so they have created a level of uncertainty as to what contracts will be subject to such an obligation. The Courts have, however, implied such an obligation into certain types of contracts, including franchise contracts, and have defined the obligation, by looking at, amongst other factors, the legitimate interests of parties and the extent to which a party has acted reasonably. The issue may be clarified following a review of the Franchising Code of Conduct. The case law in New Zealand is similarly equivocal and the courts generally imply a duty of good faith only into specific types of contracts, for example joint venture and employment contracts.

Canada – developments affecting franchising

Leonard H. Polsky, Gowling Lafleur Henderson LLP, Vancouver, Canada

This article reviews recent judicial and legislative activity affecting franchise law in Canada. Key developments include proposed franchise legislation in British Columbia and important courts decisions on the question of who is the true employer within a franchisor – franchisee relationship, on the franchisor’s obligation to protect its brand and on the issue of good faith in franchise relationships.