Because franchise agreements are often signed for long periods of time (generally two to ten years), it is very important for any franchisor, and for anyone drafting a franchise agreement, to make sure that the risk (which is very real and constant) of laws or regulations being changed or of new laws or regulations, or new case law, is covered by appropriate provisions that properly tailored to the network’s industry.
Foreign-based franchisors may wonder how difficult it would be to expand their businesses into the United States. One possible solution is for the foreign-based franchisor to initially sell its U.S. franchises to citizens of its home country, or citizens of other countries where it may already have an established presence. Fortunately, in most cases, a foreign franchisee will be eligible to own and operate a franchised business under the E-2 treaty investor category.
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