ICC Model International Franchising Contract

What are the main features of this model? 

An international business transaction requires a precise and detailed underlying contract. However, it can be expensive and time-consuming to draft such a contract oneself. The ICC Model International Franchising Contract responds to the market’s need for a reliable and equitable template, providing a set of clear and concise standard provisions to organize international direct franchises. 

International direct franchises are a rapidly expanding business instrument and make a considerable contribution to growth in various industry sectors. A lack of uniform international rules complicates matters, though.  

Since there is no internationally agreed uniform legislation on franchising, parties must rely on national law and regulations applicable to franchising (if any), which typically do not take into account the specific needs of international trade and may differ substantially from one country to another.  

There are various possibilities for internationalization of a franchising system.  The traditional approach involves a franchisor creating a wholly owned company or appointing a master franchisee in another country, which will organize a domestic franchising network. This model, however, covers a different structure: cross-border direct franchising where the franchisor directly appoints franchisees in another country.   

The model covers areas such as :

• franchisor’s licensing of know-how, trademarks and symbols and provision of training and assistance to the franchisee,
• and the franchisee’s payment of fees to the franchisor, compliance with franchisor’s commercial standards, and quality control in the protection of franchisor’s intellectual property. 

The model also provides a system to resolve disputes, including the service of notice of defaults and the opportunity to cure.