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Vol 8 (2010) - Issue 6

Data protection in franchise systems – The German perspective

Marco Hero, Partner, TIGGES, Munich, Germany

Data protection is an issue of increasing importance for franchise systems where data may be transferred between franchisors, franchisees, customers and third parties. This article sets out in detail the German legal framework governing the collection, storage, processing, use and passing on of personal data in general and its impact on franchisors, franchisees and franchise agreements in particular.

The application of competition law to land agreements in the UK – Implications for franchising

Nick Pimlott, Partner, Field Fisher Waterhouse LLP, London, UK

With effect from April 2011 land agreements will no longer be exempt from the prohibition on anti-competitive agreements in the UK Competition Act 1998. In the franchising context it means that in the UK the Competition Act could apply to restrictions in leases/sub-leases between franchisors and franchisees restricting the activities of the franchisee on the franchised premises. It will be important that the property aspects of any deal are included in any assessment of the franchise agreement for compliance with competition law.

Choice of law provisions

David W. Oppenheim, Partner and Felicia A. Nadborny, Associate, Kaufmann Gildin Robbins & Oppenheim LLP, New York, United States

This report analyses two US cases which address the enforceability of choice of law provisions in franchise agreements which specify the body of law under which disputes between franchisors and franchisees are decided. Choosing the appropriate law to govern a franchise agreement is important since, as demonstrated by the cases discussed here, courts will generally enforce choice of law provisions so long as the application of the chosen state’s law will not offend the public policy of another state.

Brazil – Compensation for goodwill in franchise agreements

Cândida Caffè, Partner and Luciana Bassani, Attorney, Dannemann Siemsen, Rio de Janeiro, Brazil

This article addresses the crucial questions of who owns the goodwill in a franchise system and whether a franchisee is entitled to be compensated for the value of its business if its agreement terminates or expires under Brazilian law. In the absence of any statutory provisions, the analysis of the terms and conditions of the franchise agreement is extremely important in determining whether the franchisee is entitled to receive any compensation for goodwill, particularly local goodwill and clientele developed through the franchisee's efforts, upon termination and non-renewal of the franchise agreement.

Franchising and the new competition law in Hong Kong

Vivien Chan, Partner, Vivien Chan & Co., Hong Kong

The Competition Bill was introduced to the Legislative Council in Hong Kong on 2 July 2010 and is expected to have wide-ranging impact on the business community. This article examines the likely impact of the new competition law on international franchising arrangements in Hong Kong, particularly in the areas of resale price maintenance, territorial or customer restrictions, and non-compete obligations. The new legislation will provide the courts with a measure of flexibility and discretion with regard to its application, taking into account the practice in other jurisdictions, the changing market conditions and business conduct.

Liberalisation of Indian government’s policy on payments for technical collaboration & franchises

Preeti Mehta, Partner, Kanga & Co, Mumbai, India

The Indian Government has significantly changed its approach to foreign investment and payments of royalties and fees made for foreign technology collaboration, including payments for the use of brand names or trademarks in the context of franchise arrangements. All restrictions on franchise payments have been removed. This article sets out in detail the revised rules and the implication for the rapidly growing franchising sector in India.