Partner Andrew Sherman Provides Franchising Tips in Corporate LiveWire Roundtable

Partner Andrew J. Sherman participated in a Corporate LiveWire virtual roundtable discussion on the risks and challenges of a global franchise market.

Published on Oct. 14, the roundtable also included franchise law professionals from around the world.

Sherman explained that the basic guidelines for establishing an effective and long-lasting franchisor-franchisee relationships have evolved rapidly over the last 10 to 15 years.

"The relationships that once looked a lot like a parent-child dynamic is now more like two parties preparing to get married for a lifelong relationship that must be guided by trust, respect, transparency, engagement, innovation, and ongoing creativity," Sherman said. "The economics of that relationship must be fair and reasonable with shared risk and shared reward. The days of economic imbalance are over and will not be tolerated by today's sophisticated franchisees."

Asked what are the risks and opportunities to expanding a franchise internationally, Sherman pointed to strong consumer demand for diversity of product and service offerings as a benefit and the disturbing political trends towards nationalism, protectionism, excessive trade, tariffs, foreign direct investment laws and difficulty in transferring currency abroad as negative impacts.

"Once a company commits to expanding its business format franchise abroad, it needs to consider whether there will be any adjustments to its core system from a pricing, design, sizing, labelling and trade dress perspective," he said. "It needs to balance the need to adapt the franchise systems for overseas implementation against the competing need to maintain a certain consistent customer experience around the globe."

View the discussion here.