Drafting Franchise Agreements in Civil Law Jurisdictions

• Author: Babette Märzheuser-Wood
• Pages: 317-328

Chapter 8

Drafting Franchise Agreements

in Civil Law Jurisdictions

Babette Märzheuser-Wood

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317

II. The Civil Law Approach to Contract Drafting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318

A. Key Differences Between Civil Law and Common Law Contracts . . . . . . . . . . . . 318

B. Acceptance of Anglo-American–Style Franchise Agreements

in Civil Law Jurisdictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319

C. Good Faith and Fair Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321

D. Choice of Law and Impact on Drafting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

III. To Localize or Not to Localize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324

A. Appropriate Levels of Localization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324

B. Mandatory Local Law Re views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

C. Additional Levels of Localization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

D. Translations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326

IV. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

I. Introduction

Franchisors from the United States generally have in place a well-drafted detailed set of fran-

chise documents by the time they have reached the requisite size to take their brand interna-

tional. These documents are likely to be based on U.S. law and, accordingly, the approach to

drafting will be extremely detailed and prescriptive. In contrast, in civil law jurisdictions, con-

tracts are much shorter because civil law countries operate on the basis of a detailed civil code

that assists the draftsperson with definitions and general principles of law. These principles do

not need to be repeated in the contract, as they are generally understood to apply and often

cannot be deviated from by the parties. This chapter explores the civil law approach to contract

drafting and contrasts it with the common law style that is driven, in large part, by reaction to

case law. It looks at choice of law and the impact choice of law has on drafting and discusses

the extent to which it may be appropriate to adjust franchise agreements to local law require-

ments and local business practices.

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