Legal Translation of Franchise Agreements

Legal Document Translation Services for Franchise Attorneys

There’s a growing need for professional translation of Franchise Operations Manuals from English to other languages. According to the International Franchise Association, one of the leading trends in the franchising world today is the internationalization of franchises. This is made clear by the obvious brands, such as McDonald’s, Subway and 7-Eleven, which can be found in all corners of the globe. But it is also a trend for the less known and smaller franchises that identify new markets in foreign countries. Likewise, many foreign franchises are appearing in the US market, creating new opportunities for aspiring American entrepreneurs.  As franchising continues to become more and more global, the importance of having a professional legal translation of all franchising agreements becomes essential.

Here are some foreign language translation tips you should keep in mind when considering or entering into an international franchising agreement:

  • Protect your intellectual property in the foreign jurisdiction. Although you may have trademark protection in the US, this will not extend to the foreign country. Before starting the international franchising process, first consider international trademark registration, which will require the use of a foreign language translation of your original trademark protection materials.
  • Due diligence is non-negotiable. Before you start drawing up papers, make sure your business partner is credible and legal. To help you communicate with various foreign entities during this process, consider hiring a foreign language interpreter.
  • Review local law to decide what type of business structure is best for you. Although the master franchise agreement is the most common business form for an international franchise, depending on the jurisdiction other options may be available. For example, direct franchising, international subsidiaries and international joint ventures could all be viable options. However, to be able to make an informed decision you must first understand the local law. This too will require a careful foreign language translation.
  • Modify your existing US franchise documentation for use in the foreign jurisdiction. This will include having a foreign language translation of all relevant documents into the official language of the country you plan to do business in.
  • Register your franchise with the proper government agency in the foreign country. Registrations will likely have to be done in the local language.

Legal Translation of Master Franchise Agreement

As mentioned above, the master franchise agreement is the most common form for establishing an international franchise. In a master franchise agreement, the US franchisor will give the foreign master franchisor the right to use the marks and system in connection with said franchise within a particular territory and for a set period of time. Within that territory and timeframe, the master franchisor will serve as the franchisor and will be responsible for developing leads for prospects, signing all agreements, training and monitoring. In return, the franchisor will be paid a portion of the revenues as royalties.

This setup offers many benefits. For example:

  • The master franchisor is often a native of the foreign country and thus familiar with the language and culture.
  • The master franchisor may have helpful business experience, business contacts, and government contacts in the relevant country.
  • The in-country master franchisor can provide training and support to franchisees easier than the American franchisor.
  • Obtaining foreign language translations of all franchise materials is the responsibility of master franchisor.
  • The requirement of complying with the applicable foreign laws is the responsibility of the master franchisor.

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