LATIN AMERICA

Franchising is not specifically regulated in most of Latin American countries. Franchising is regulated by general provisions of civil and commercial laws. Other related local laws may be applicable to franchising: industrial property, tax (international treaties), foreign investments, foreign currency restrictions, labor, consumer protection, antitrust laws.

Latin American countries with specific franchise legislation: Brazil and Mexico. Brazil: Law No. 8955/94. Required disclosure document. Most relevant developments relate to trademark matters. Mexico: Industrial Property Law, amended in 2006 (required disclosure document, requisites of franchise agreements).

Other countries with special references to franchising: Peru (optional recording of franchise agreements); Paraguay (trademark licenses through franchises are regulated by trademark laws); Venezuela (Guidelines on franchise agreements). General tendency in the region: develop franchise laws. Commerce chambers and associations promote adoption of franchise legislation in each country. Preliminary stage: ethic codes on franchising (Argentina, Chile, Colombia, Guatemala, Venezuela). Solution: Copying foreign models?

Most important concerns when a franchise system is expanded internationally: Protection of IP rights. Legal restrictions (i.e. tax, foreign investments, foreign currency, labor, consumer protection, antitrust laws). Understand local uses, practices and culture. Enforceability and remedies in the event of a breach. Mandatory requirements for choice of law, jurisdiction, dispute resolution mechanisms or venue designations. Contact experienced local counsel.

Jorge Mondragon Gonzalez Calvillo, S.C. Montes Urales 632, Piso 3 Lomas de Chapultepec, 11000, Mexico, D.F. T + (5255) F + (5255)