Your Business into International Markets
of Robinson Waters & O'Dorisio. His practice emphasizes franchising;
real estate and lending; corporate transactions; and commercial
and business law. He is the firm's most experienced attorney in
franchising law and provides counsel to several franchisors in both
U.S. and international franchising matters.
1099 18th Street, Suite 2600
Denver, Colorado 80202
303.297.2600 Phone
303.297.2750 Fax
dferguson@rwolaw.com
www.rwolaw.com
1099 18th Street, Suite 2600
Denver, Colorado 80202
303.297.2600 Phone
303.297.2750 Fax
rbliss@rwolaw.com
www.rwolaw.com
His practice includes a wide variety of commercial and corporate
transactions, trademarks, and real estate, with a focus on franchising.
He advises small and medium-sized businesses with franchising
issues on a national basis.
one who operates, a business that has
proven successful and is growing in the
United States, at some point you will no
doubt begin considering expansion into
international markets. Entering an inter-
national market presents many unique
business, legal and cultural challenges
that are not encountered in domestic
growth. Directly opening and operating a
company-owned location internationally
is the first and most obvious option, but
the expense and social barriers may be
too much for many businesses. Whether
your (or your client's) business has
franchised in the U.S. or not, you should
consider using the franchise business
model for international expansion.
the franchisor, granting rights to an in-
dependent third party, the franchisee, to
use the franchisor's trademark and busi-
ness concept. The franchisor is entitled
to fees and exercises some level of con-
trol and supervision over the franchisee's
business, but the business is owned and
operated by the franchisee. The trade-
mark license, fee payment, and control
aspects are the key elements that usually
characterize a franchise, although each
country's laws differ slightly in defining
a franchise.
The key benefit of the franchise busi-
ness model in international expansion
is the ability to leverage the experience
and resources of the franchisee. A local
try's business practices and culture will
presumably have advantages in operating
in that country. Further, the franchisee
usually incurs the costs of opening and
operating the business, thus reducing the
franchisor's expenses.
franchise models that can be used in in-
ternational expansion: "Unit Franchises"
and "Master Franchises."
A Unit Franchise refers to the stan-
dard franchise arrangement, where a
franchisor grants the franchisee the right
to operate one or more franchised busi-
ness outlets.
In a Unit Franchise arrangement, the
franchisor is contracting directly with the
unit franchisee. This gives the franchisor
direct control over the unit franchisee.
The franchisor, however, also has direct
responsibilities to the unit franchisee.
The franchisor may find it difficult to
supervise and enforce obligations against
a franchisee outside the U.S.
A Master Franchise involves granting
a franchise to a single person, the master
franchisee, for a large territory, which
may be an entire country, in which the
master franchisee is authorized to grant