In a recent article with Franchise Times, Haynes Boone Partner Alberto de la Peña shared insights on why Mexico offers a franchise-friendly environment. He highlights the country’s nationwide intellectual property framework and explains how franchisors can choose between master franchise and multi-unit structures based on desired levels of control.
Read an excerpt below.
“There’s a federal law on intellectual property that applies nationwide,” Pena said. “It regulates trademarks and licenses, while also having a chapter on franchising. The concept is, there’s the trademark of the franchise, and the ‘know how,’ with the rights to operate the store.”
Under Mexico’s industrial property law, franchisors are required to provide franchisees with a disclosure document 30 days before the execution of a franchise deal. Pena said the types of deals can vary, noting how he’s seen a mix of standard franchise agreements and master deals.
“It’s an important distinction, depending on what capabilities and expectations the franchisor feels are important,” Pena said. “Master franchise agreements regulate a lot of control, leaving the whole operation for them. If the franchisor wants a higher level of control, they can go the multi-unit, area development path.”
Read the full Franchise Times article here.
