farhad emam Farhad Emam
Publish Date : 03/04/2016

When will Tehran get a McDonald's

Iran nuclear deal: When will Tehran get a McDonald's?

It is reported by Roland Hughes from BBC News on January 16, 2016 that:

Since the deal [JCPOA] was announced, one subject has been getting quite a few Iranians talking on social media - is it now inevitable that one of the most American of brands will arrive in Iran?

The response given by McDonald’s is revealing as mentioned in the same report:

But its international website says: "We have not set a firm date for the development of McDonald's restaurants in Iran," adding that, in the future, they "may take steps to do so".

In other words, McDonald’s is postponing opening a franchise in Iran to an uncertain time in future. In the meantime, two questions call for answer:

1. What is the legal basis of opening a franchise in Iran?

2. If there is no law or regulation to regulate franchise activities in Iran, what are the terms to be included in the franchise agreement to be signed with an Iranian partner?

First, it must be noted that the Iranian franchise law is based on general contract law, intellectual property law, employment law and business law of Iran. It flows from the above statement that everything in a franchise relationship of McDonald’s with an Iranian partner will turn around the McDonald’s Franchise Agreement available at the address mentioned below.

Secondly, the parties to a franchise agreement need to agree on a governing law. It is difficult for the Iranian partners to easily accept a foreign law as the governing law of their franchise agreements. A possible solution is to choose model laws such as UNIDROIT Franchise Disclosure Law as the governing law of their franchise agreement. The link to this Law appears at the bottom of this Legal News.

http://www.bbc.com/news/world-middle-east-33549187

http://www.mcdonalds.com/us/en/terms_conditions.html

http://www.unidroit.org/instruments/franchising/model-law

 

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