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Vol 11 (2013) - Issue 2

Franchising in Africa

Kendal H. Tyre, Nixon Peabody LLP, Washington, D.C., USA

Franchising in Africa has experienced phenomenal growth in recent years. This growth is likely to continue as legislative and economic reforms take hold and Western franchisors and others look to new markets to expand after years of declining growth in their own domestic markets. The franchising concept and franchise legislation are relatively new in Africa. A variety of regulatory frameworks as well as different substantive and formal requirements exist. This article considers the current state of the African franchising sector and considers in detail the law and regulation applicable to franchising in Angola, Nigeria and Tunisia.

Private equity funds in international franchising

James J. Goodman, Gemini Investors, Wellesley, Massachusetts, USA, Andrew P. Loewinger, Nixon Peabody LLP, Washington, DC, USA, Gilles Menguy, Gast & Menguy, Paris, France, Ted P. Pearce, Nexsen Pruet PLLC, Charlotte, North Carolina, USA and Carolyn J. Vardi, White & Case LLP, New York, USA

This article examines private equity’s role in franchising generally and more specifically in international franchising by considering private equity and international franchising from a variety of distinct perspectives – that of the U.S. private equity investor; that of the US acquisition counsel; that of the general counsel of a target firm; and that of a European outside counsel. The authors examine the history and growth of private equity; private equity and franchising viewed from a European perspective; the attraction of franchising to private equity and characteristics of the relationship; some of the legal issues arising in a PE group’s acquisition and operation of a franchise system; and ways in which the interests and perspectives of a private equity and a franchise system may diverge.

Five years after Leegin, can franchisors safely establish resale price maintenance programs?

Kevin M. Shelley, Kaufmann Gildin Robbins & Oppenheim LLP, New York, USA

Until recently, franchisors were forbidden by U.S. federal antitrust law from compelling their franchisees to offer products or services at a predetermined retail price. But the law has changed and “price point advertising” – advertising a product or service for sale at a unitary price at every outlet nationwide – has become a cornerstone of many national franchisors’ advertising message. This article examines whether the changes brought about by the Leegin case are sufficient to allow a franchisor to join the growing number of franchisors implementing resale price maintenance programs. The author concludes that franchisors must closely examine the relevant case law, take account of applicable state antitrust laws, and amend their franchise agreements to reserve the right to impose minimum or maximum retail prices upon their franchisees.