How to Help the Foreign Investor Buy Your Franchise

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So you have a franchise prospect. The prospect's native language is not English. Maybe the franchise prospect is not very fluent in the English written word.

Do you have to translate the franchise disclosure document into another language? The quick answer is 'NO.'

US franchise disclosure laws do not require franchisors to translate the franchise disclosure document, FDD, into the native language of the prospect.  If you are looking to franchise outside the US border, that is whole different conversation.

While not required to provide translation, franchisors may be confronted with what to do if a franchise prospect does not comprehend English very well.

Providing translation of the disclosure document inherently carries risks. There is the risk that the translated disclosure document will be inaccurate or carry an untended meaning. There is a risk that the disclosure document will inadvertently go awry of disclosing prescribed franchise disclosure legal mandates.

Or that the translated disclosure, by way of translation, will somehow be different or incongruent with the English disclosure document.

But is a franchisor to do? It is important that franchisees understand what they are signing when they enter into a franchise agreement. And, couldn't the franchise agreement be rendered void, if the franchisees successfully claim that they did not understand what they were signing when they signed the franchise agreement?

A good solution is to advise and support franchisees in seeking their own translation and consultation services for translation and comprehension of the franchise documents.

This post is in response to a reader's question. Do you have a question you want us to answer in a post? Email us with your question mbgettins@gettinslaw.com!

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This page contains a single entry by Mary Beth Gettins published on February 10, 2013 1:10 PM.

Do You Know These Secret Franchisor Winning Litigation Strategies? was the previous entry in this blog.

Starwood, Hyatt, and IHC Brands Used to Trick Chinese Investors is the next entry in this blog.

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