Legal Translation of International Franchise Agreements
There’s a growing need for legal translation of international franchise agreements. McDonald’s, 7-Eleven, Dunkin’ Donuts, and the UPS Store – based on cost, size, growth, franchise support, and brand strength- these four franchises top the list in Entrepreneur Magazine’s 39th Annual 2018 Franchise 500 Ranking. The reach of these franchises is, as you would expect, international.
If you are a franchisor, or you represent a franchisor, that already has a global portfolio or is starting to expand into foreign countries there are many hurdles to overcome when reaching into another country. The language, the laws, the culture, the customs, and, oftentimes, the customers can be vastly different.
Of course, with any franchise venture into a foreign country, you need to do your due diligence. That means:
1. Make sure you do market research and consult with local franchise counsel in the country where the new franchise will open.
2. Have the franchisee, with you as franchisor, develop a practical plan to efficiently and effectively execute an international franchise relationship.
3. Consult with counsel on the various cost options available in effectuating the franchise. Find the strategy that works best for you as franchisor.
4. Ensure that counsel for the franchisor and franchisee have all the tools necessary to successfully complete the international franchise agreement.
As part of that due diligence, however, it is very important to keep in mind how legal translations are handled.
Now, of the many things that go into an international franchise arrangement, you are probably thinking that translating documents would not be a high priority, or at least not something that could be a serious sticking point in negotiations. Think again.
It turns out that certain countries may have a copyright issue with regard to franchisor documentation, handbooks, and the like. Accordingly, read on to avoid the pitfall of your franchise losing rights to your own, branded documentation.
Legal Translations and Protecting Your Copyrights Internationally
• The Berne Convention
The first step to understanding the issues surrounding protection of your copyrights in manuals, training materials, advertising materials, and other documents is to become familiar with the “Berne Convention for the Protection of Literary and Artistic Works” (“Berne Convention”).
The Berne Convention is an international agreement that governs copyrights internationally. It is so called because it was first accepted in Berne, Switzerland in 1866.
Before the Berne Convention, national copyright laws typically applied only to those works that were created in that country. So, for example, a work created by a French national would be covered by copyright law in France, but not in England. In the mid- to late-1800s the Berne Convention came into being to address that problem.
Accordingly, the Berne Convention requires countries that are part of the convention to recognize the copyrights held by citizens of all other member countries. As of February 2018, 175 countries were parties to the convention, including the 172 United Nations member states.
• Challenges Arise When Onboarding a Foreign Franchisee
It is common that a franchisor will require franchisees in different countries to translate the operations manuals and marketing materials for the franchise into the local language. Of course, the Berne Convention would protect the original documents that the franchisee needed to translate. However, the translated documents may, surprisingly, be considered original work. As such, the translator may have some rights in that translated material.
Moreover, in order to accommodate the culture and tastes of the foreign market, the franchisee may need to do a little tailoring of the franchisor’s operations manual and marketing materials, or even create some new materials to appeal to the foreign market. Those customizations and additional material may also be considered the original work of the franchisee. Thus, a franchisor could have a real problem on its hands – losing the copyright to those materials it originally created for all franchises.
Indeed, when it comes to a franchisee translating or customizing company documents, a franchisor faces two distinct problems:
1. Ownership: Even when a franchisor claims a copyright in the original franchise documents, does the local franchisee get ownership over the rights to the translations, modifications, and necessary additional materials to those original documents?
2. Poor Translation: When a foreign franchisee translates franchise operations manuals and marketing materials, how can the franchisor know the translations are accurate both in meaning and spirit?
The good news is that those problems are easily solvable.
• Ensuring the Franchisor Keeps Ownership of Translated Franchise Materials
With regard to the first problem (ownership over translated/modified/new materials customized for the foreign franchisee), the solution is in a well-crafted Franchise Agreement between the franchisor and foreign franchisee. Your counsel should ensure that in the Franchise Agreement there is a clause that expressly indicates that the franchisor will own the rights to any franchise materials that have been added, improved, or adjusted for the local market, as well as any translations. Further, the agreement should provide that the franchisee waives all rights, including “moral rights” (if possible) in the works derived from the franchisor’s original content.
With regard to the second problem, a franchisor would do well to hire a professional legal translation service to handle all translations. Having control over the translation portion can ensure accuracy and quality, and the franchisor can also require the translator to sign a waiver of rights to the translated materials, just to be sure that the Berne Convention does not work against the franchisor. In that vein, consider employing the services of All Language Alliance, Inc.
We are the hallmark of professionalism, and we employ only the best legal translators who understand the nuances of many languages. We have the skill to correctly translate even the most technical legal documents – like franchise agreements, operations manuals, franchise disclosure documents (FDD) and marketing materials from English to foreign language, including Spanish, Russian, Chinese, French, German, Swedish, Portuguese, Bhutanese, Dzongkha, Swahili, Haitian Creole. Let us know how we can help you by filling out the “Translate Documents Now!” form on the right.
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