The issue of applicable law in international franchising Silvia Bortolotti

Index Contractual framework Choice of law Effectiveness of the choice Co-ordination with the choice of forum/arbitration Law applicable in the absence of choice

Contractual framework Master franchising: contract between franchisor and master franchisee contracts between the master franchisee and the sub-franchisees Area development / area representation: contract between franchisor and area developer / area representative contracts governing the franchise units

Choice of law Laws of the franchisor’s home country Laws of the host country Laws of a third country Further solutions (e.g. lex mercatoria, UNIDROIT Principles)

Effectiveness of the choice Provisions that can be derogated from by the parties Mandatory rules Internationally mandatory rules

Co-ordination with the choice of forum/arbitration Application of internationally mandatory rules by national Courts Enforcement of foreign judgements

Conclusive remarks on choice of law The choice of law (together with the choice of forum/arbitration) should not be overlooked while drafting and negotiating those types of contract It is advisable to carefully verify the effectiveness of the specific contractual provisions within the host country

Law applicable in the absence of choice Possible criteria provided by conflict of law rules: -characteristic performance -law of the franchisee's country -law of the place where the contract was concluded -law of the place of performance

Thank you for your kind attention! Silvia Bortolotti