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Court cases brought between 2019-2023 before the Court of Justice of the European Union (“CJEU”) having intellectual property as the subject matter ranked second in terms of their total number (after those involving freedom, security and justice). Navigating the vast IP ocean, one recent case stood out in particular (Case C-227/23 – Kwantum Nederland and Kwantum België[1]), insofar as it involved a potential conflict of laws between EU and the international laws. The conflict was eventually settled by CJEU’s binding decision as of 24.10.2024. By upholding the very principles of EU law, CJEU has opened the door wide for international creators of works of applied art[2] who will now enjoy sufficient protection for their works within all the EU member states. 1.Facts The smallest snowflake can cause the greatest avalanche. This is also the situation in the present case, where the avalanche effect was produced by perhaps nothing more thrilling than a... chair. But an admirably crafted one. Vitra Collections AG (“Vitra”), a company incorporated under Swiss law, produces designer furniture, in particular chairs, including the well-known Dining Sidechair Wood (“the DSW chair”), designed in 1948 by the now deceased couple Charles and Ray Eames, who were citizens of the United States of America. In the Netherlands and Belgium, Kwantum Nederland BV and Kwantum België BV, two businesses operating under Dutch law (“Kwantum”) run a chain of stores that offer furniture and other household goods. In 2014, Vitra discovered that Kwantum had been selling and promoting a chair under the name “Paris”, which allegedly violates its copyright for the DSW chair. In this context, Vitra brought an action before the Dutch courts with the aim, among other things, of stopping the sale of the Paris chair. In first instance, the District Court of Hague held that Kwantum did not infringe Vitra’s copyrights and that it did not act unlawfully by selling the Paris chair and, consequently, rejected Vitra’s applications for the protection of its own IP rights on EU territory. The first court's judgment was overturned by the Court of Appeal of Hague, which considered that Kwantum did infringe Vitra’s copyrights on the DSW chair and that the chair itself was eligible for copyright protection on EU territory. Further appeals were subsequently lodged by the parties before the Supreme Court of the Netherlands, which reached an impasse on the interpretation and complementarity of the provisions of Dutch copyright law with those of international law. Thus things stand, the Supreme Court decided to stay the proceedings and to refer to the CJEU for a preliminary ruling, mainly requesting the EU court to offer guidance regarding the protection that may be given in the European Union to works of applied art originating in a third country, when the creator of the work is not a citizen of a Member State. 2.The material reciprocity clause - Berne Convention De jure, given the DSW chair's USA “citizenship”, the key element in understanding the CJEU's ruling in the above-described case is the understanding (and potential applicability) of the reciprocity clause contained within the Berne Convention[3]. The Berne Convention establishes a general principle of “national treatment”, wherein authors originating from the signatory states of the Convention are entitled to the same intellectual property rights in another signatory state as that state’s own citizens or residents would be entitled to. However, Article 2(7) of the Convention creates an exception which applies both to works of applied art, and to industrial designs and models – the first category being of interest to the present case. In the specific cases involving these categories of creations, the Convention requires that the material reciprocity test is to be carried out in order to assess the level of protection that is to be granted to such creations. The material reciprocity test implies that if the laws of the country of origin of a work provide protection solely under industrial design or model laws (rather than copyright law), other signatory states are not obligated to extend copyright protection beyond what is recognized domestically. To put it briefly, copyright protection is of a limited nature as regards works of applied art that are not protected in their author’s country of origin, thus allowing other signatory states to refuse to grant greater copyright protection. It is not disputed that, under Dutch copyright law, the work in question would qualify as a work of applied art. Nor is it disputed that, in accordance with Article 5(4) of the Convention, the U.S. is the country of origin of the work. However, in the Dutch courts, the parties disagreed on whether, considering the state of harmonised copyright law, the court should apply the reciprocity test[4]. Under U.S. law, works of applied art can receive copyright protection if their artistic elements are separable from functional aspects. For example, while the structural function of a chair is not copyrightable, unique sculptural features that don't impact function (like the DSW chair's distinct design and its specific processing of raw materials) may qualify for copyright. By (hypothetically) performing the material reciprocity test, it would be concluded that if a country (like the U.S.) only protects certain applied art as designs (and not under copyright), other signatory states are not obligated to provide copyright protection for those works. The applicability of this clause is critical in the case at hand because it questions whether EU Member States (or the EU legislature itself) can limit protection for the DSW chair based on the type of protection it receives in the U.S. Consequently, it follows that the case at hand raises significant questions as regards the copyright protection enjoyed throughout the EU territory in respect of works which do not originate in the EU. The answer given by the CJEU will thus have profound implications for the harmonization of copyright protections across jurisdictions. 3.CJEU Judgement. Importance In its decision, the CJEU stated that Member States cannot apply a material reciprocity criterion for works of applied art originating from third countries, such as the U.S., based solely on the protections available in those countries, as would be required under the reciprocity clause. Furthermore, the EU Court clarified that only the EU legislature itself can decide if, and to what extent, copyright rights might be limited within the Union. In short, the decision signals that neither the place where a work of applied art was created, nor the nationality of the creators themselves is of any relevance, since, due to the protection provided under EU rules, they are equally protected in any of the EU Member States. The CJEU decision finds itself in complete harmony with Advocate General Szpunar's view[5], which found on 5 September 2024, in its groundbreaking Opinion, that the protection offered by the EU legal framework to works of applied art also extends to those residing in third countries. In terms of importance, the CJEU's decision appears to be fundamental for protection of the IP rights across the European area, because it reinforces the EU's commitment to unified copyright standards, holding firm against external influences and ensuring a cohesive, fair environment for creative rights across all Member States. Consider an example involving a Japanese artist whose mural is protected only as an industrial design in Japan. Under the CJEU's decision, if this mural is displayed in the EU, it will receive full copyright protection, unaffected by Japan’s more limited protection. This ruling establishes that EU Member States must consistently apply EU copyright standards, regardless of the work’s origin or the creator’s nationality, ensuring a harmonized legal framework for intellectual property rights within the EU. Given all of the above, one can only imagine that the worldwide creative community will be more than eager to learn about the significance of the CJEU's decision delivered in the case discussed in the present article. Authored by Patricia Gorici, Associate Irina Vasile, Partner *** For any IP-related inquiries, applications or disputes – regardless of the place of creation or the nationality of the creator – Lexters professionals are skilled with all the necessary expertise to deliver results of the highest quality for both national and international clients. Do not hesitate to contact us should you be in need of any assistance, representation or simply answers to your own questions. [1] The complete decision can be accessed here. [2] Works of applied art = works that apply design and decoration to everyday and essentially practical objects in order to make them aesthetically pleasing. [3] Berne Convention for the Protection of Literary and Artistic Works, adopted in 1886, deals with the protection of works and the rights of their authors. It is administered by the World Intellectual Property Organization and has so far been ratified by 181 states worldwide, including the 178 UN member states. It provides creators with the means to control how their works are used, by whom, and on what terms. It is based on three basic principles and contains a series of provisions determining the minimum protection to be granted, as well as special provisions available to developing countries that want to make use of them. Berne Convention can be accessed here. [4] M. Eechoud, A. Metzger, J. P. Quintais, O.A. Rognsta, Opinion of the European Copyright Society on Certain Selected Aspects of Case C-227/23, Kwantum Nederland and Kwantum Belgie, IIC - International Review of Intellectual Property and Competition Law, 2024.   [5] Opinion of Advocate General Szpunar in Case C‑227/23, delivered on 5 September 2024, can be accessed here.

The CEE Tech Sector Monitor 2026, produced by Dealsuite together with Lexters, a Bucharest-based business law firm, finds that software and IT services companies in Central and Eastern Europe (CEE) trade at the lowest valuation multiples of the seven European regions Dealsuite tracks. Key takeaways CEE software companies traded at 7.0x and IT services companies at 6.2x in H1 2026, against 8.9x and 7.7x in DACH. an IT services company for sale in CEE drew 8.2 interested buyers on average in H1 2026, against 6.6 in H1 2025. sellers overvalue their company in 47% of CEE sale processes, and 35% of those end in a collapsed deal (all sectors). Why are CEE tech valuations the lowest in Europe? According to the Monitor, average Enterprise Value multiples in H1 2026 were lower in CEE than in DACH (Germany, Austria and Switzerland), the most expensive of the seven regions. H1 2026: Software development: CEE 7.0x v. DACH 8.9x IT services: CEE 6.2x v. DACH 7.7x Source: CEE Tech Sector Monitor 2026. Software development is the only CEE sector whose multiples rose in every half-year since H1 2024, from 6.4x to 7.0x. Engineering is cheaper: IT salaries are 30 to 40% below Germany, the Netherlands or Luxembourg. The market is also fragmented: Eurostat data for 2024, cited in the Monitor, shows about 443,000 software and IT services companies in the 11 EU member states of the region. Who is buying CEE tech companies? The Monitor shows 8.2 interested buyers per IT services company in H1 2026, the highest level and largest increase among 13 sectors, whose average was 5.3. In August 2025, advisers expected IT services to see the biggest fall in deals; by August 2026 they ranked it top three for growth. According to CMS data cited in the Monitor, 60.8% of CEE transactions across all sectors in 2025 had a foreign buyer, mainly from the US, the UK and Germany. Why do deals fail despite high interest? The Monitor reports that sellers overvalue their company in 47% of CEE sale processes, by 28% on average, and that in 35% of those the gap ends the deal. These figures cover all sectors. Irina Vasile, Partner at Lexters, says that “valuation gaps, transaction structure, and the early identification of legal risks can make the difference between a negotiation that reaches closing and one that falls apart along the way.” What did The Sandbox and QED Builders teach about token payments? In 2025, The Sandbox, a metaverse platform, acquired Timișoara-based blockchain company QED Builders, and Lexters advised on the deal. Part of the price was paid in tokens, with no Romanian precedent, according to the Monitor. Alexandru Stănescu, Partner at Lexters, says: “We treated the token component of the consideration with the same rigour as a cash payment, specifying the transfer protocol, the reference valuation mechanism, the settlement window and the consequences of failed or delayed transfers.” Two lessons for deals paid in digital assets: 1.       Bring tax advisers in early. The tax treatment of token transfers is still evolving across CEE, so settle it before closing. 2.      Draft for the gaps. Standard share purchase agreements do not cover token transfers, volatility or regulatory uncertainty. Download the full CEE Tech Sector Monitor 2026 (Dealsuite × Lexters) More about Dealsuite. About Lexters Lexters is a Bucharest, Romania business law firm focused on technology. It advises startups, founders, investors and established companies on M&A, venture capital, blockchain and digital assets, intellectual property, and data protection and regulatory compliance. Ranked by Chambers in Fintech in 2024-2025,  and The Legal 500 2025-2026.

Lexters, in consortium with the Belgian law firm Strelia, is proud to announce its role as legal counsel for the Romanian State, through the Ministry of Finance, in a landmark legal dispute against the pharmaceutical consortium Pfizer Inc. and BioNTech Manufacturing GmbH. The litigation, currently pending before the Francophone Court of First Instance in Brussels, involves a claim for approximately €615 million. The dispute originates from the centralized EU COVID-19 vaccine procurement framework and concerns Romania's decision to contest the delivery and payment of approximately 28 million surplus vaccine doses. This mandate represents one of the most significant public-sector litigations in Central and Eastern Europe, involving complex intersections of: EU Procurement: Interpreting the multi-state vaccine purchase agreements negotiated by the European Commission. International Contract Law: Addressing cross-border obligations undertook in unprecedented global pandemic conditions. Intellectual Property: Analyzing the complex IP rights associated with mRNA production technology and how these proprietary frameworks impact the contractual delivery and production obligations. Following the first procedural hearing in Brussels, a comprehensive calendar has been established, involving six phases of written submissions. The Lexters-Strelia team is leading the strategic defense, focusing on the validity of the contractual mechanisms and the specificities of the Romanian context within the broader EU framework. Given the high financial stakes and legal complexity (high-stakes, cross-border, EU involvement in formation of the contract), a first verdict could be reached in a few months, though the exact timing depends on the court’s workload. As this is the first instance, the judge may still request more evidence or reopen debates on specific legal points if necessary. By handling this landmark case, Lexters continues to demonstrate its capability to act as a legal powerhouse for sovereign clients and multinational corporations alike, providing clarity and confidence in high-stakes cross-border litigation. Media coverage of the case In Romania: MediaFax interview Romania Libera Press Coverage Antena 3 Interview In international press: Euractiv TVP World Romania Insider

Since 27 September 2026, under CNA Decision No. 116/2026, published in the Official Gazette No. 718 of 28 August 2026, Romanian video creators who meet ten cumulative tests must notify the National Audiovisual Council (CNA) by 26 November 2026 and be recorded as providers of on-demand audiovisual media services. The Decision does not license content, but it brings the largest channels inside the regulator’s perimeter. Why did the CNA adopt the Decision? The Decision answers a market reality where some creators run channels that look and operate like small media services. They publish regularly, sell advertising and sponsorships, and curate catalogues and playlists for a large audience. Under EU law, such a service can fall within the audiovisual media rules even though it sits on a third-party platform. The CNA’s stated rationale is the growing reach of user-generated audiovisual content, especially among minors, aligning it with Directive (EU) 2018/1808, which amended the Audiovisual Media Services Directive (AVMSD, Directive 2010/13/EU) and extended the EU audiovisual framework to video-sharing platforms. The Decision itself targets creators rather than platforms and sets out when a channel counts as an on-demand audiovisual media service and how it must be notified. Which content creators must notify the CNA? A channel is notifiable only if it passes the cumulative conditions below. Failing one takes it outside the regime. Conditions The activity is commercial - Advertising, sponsorship, subscriptions and similar income point this way The creator has editorial responsibility and controls the selection and order of programmes in the catalogue or playlists Viewers watch on individual request, at a time they choose The main purpose is to inform, entertain or educate The service is delivered through a video-sharing platform (YouTube, TikTok, Instagram, Facebook and similar) The channel is on a platform accessible in Romania The content is accessible to and aimed at the Romanian public, including Romanians abroad - language and audience are relevant At least 100,000 followers or subscribers - may be counted across platforms At least 24 videos uploaded in the last 12 months Money, products, services or another benefit for the creator or a third party - includes benefits for the content creator   The Decision excludes content that public institutions publish to present their own activities. What is the deadline for CNA notification, and how does it work? The first deadline is 26 November 2026, 60 days after the Decision entered into force.  Creators who reach the thresholds later must notify once they meet the conditions. One filing for all platforms. A creator active on several platforms files a single notification and receives a single supply notice. What the form asks. Channel and platform details, an estimate of followers, monetisation sources, the main theme of the content and whether the channel has a system to tell viewers which videos contain commercial communications. The supply notice. It certifies that notification was made. It does not review editorial content and cannot be transferred to a third party. Publicity. The CNA will keep a public list of providers, stating the criteria on which each was qualified. What is the risk of not notifying the CNA? Failing to comply with it is treated under the Audiovisual Law (No. 504/2002), which makes it a contravention to breach the CNA’s normative decisions. In practice, the CNA first issues a formal warning notice with a deadline. A fine applies if the provider does not comply or breaches the rule again. Beyond fines, a creator that meets the ten conditions but holds no supply notice risks being treated as an unregistered provider. Brands and agencies may also ask for proof of status before signing. In our reading, this commercial pressure will arrive before any enforcement action. What changes for content creators once notified? Status. A notified creator becomes a provider of on-demand audiovisual media services. The CNA states that the content rules are unchanged, meaning the Audiovisual Law (No. 504/2002) and the Audiovisual Content Code (CNA Decision No. 573/2025), which cover the protection of minors, human dignity, accurate information and commercial communications still apply. In our reading, the practical shift is accountability. The creator is now an identified, listed provider that the regulator can supervise directly. Does the CNA approve content before publication? No. The Decision creates no authorisation of content and gives the CNA no power to approve opinions before publication. Commercial practice. Sponsored content is where the exposure concentrates. The notification form asks about monetisation and about how viewers are told that a video contains commercial communications. Brands and agencies will want to know whether a creator is notifiable, and whether they have notified. Influencer agreements will need warranties on notification status, cooperation duties when the data changes, and clear labelling rules. Open questions As a new legislation, several points will only settle through CNA practice: Editorial responsibility and commercial character. Art. 33 of the Decision does not say how much curation or what type of income is enough. Borderline channels, such as an occasional collaborator or a creator whose income is irregular, will need case-by-case analysis. What counts as a video. The decision refers to 24 audiovisual items in 12 months. The Decision does not say whether short clips, stories or livestream recordings count. Counting followers. The 100,000 threshold may be met cumulatively across platforms. The Decision does not address duplicated audiences or how the CNA will verify the figure. Foreign platforms and foreign creators. Art. 35 of the Decision looks at the jurisdiction of the platform and at whether content targets the Romanian public. How the regime applies to creators established in other Member States, given the country-of-origin logic of the EU framework, is not settled by the text. Frequently asked questions Do followers on TikTok and Instagram add up to the 100,000 threshold? Yes, the figure may be counted across platforms. The Decision does not address duplicated audiences or how the CNA will verify the number, so creators close to the threshold should document their figures. Are creators based abroad covered? Possibly. Art. 35 of the Decision looks at the jurisdiction of the platform and at whether the content is aimed at the Romanian public, including Romanians abroad. How the regime applies to creators established in other Member States, given the country-of-origin logic of the EU framework, is not settled by the text. Does notification mean a license? No. The supply notice only certifies that notification was made. It does not review or authorise editorial content and cannot be transferred to a third party. Do I need separate notifications for each platform? No. A content creator active on several platforms files a single notification and receives a single supply notice. What if my channel reaches the thresholds after 26 November 2026? You must notify once you meet the conditions. Monitor followers and uploads so that crossing a threshold triggers a filing. Do public institutions have to notify? No. The Decision excludes content that public institutions publish to present their own activities. Next steps Creators and the companies that work with them should act before 26 November 2026. 1.       Test each channel against the ten conditions and record the analysis. 2.      Review how commercial communications are labelled and whether the channel shows a contact email. 3.      Update content creator and agency agreements with notification warranties and change-reporting duties. 4.      Set a process to monitor followers and uploads numbers, so a later threshold crossing triggers a filing. Lexters advises creators, agencies and brands on the classification analysis, the notification file, the choice of structure and the contractual changes. Contact us at [email protected] if you would like a view on a specific channel before the deadline. Sources: CNA Decision No. 116/2026, published in the Official Gazette No. 718 of 28 August 2026 CNA press release of 2 September 2026

Bucharest, Romania –  October 7, 2026 – The Republic of Moldova has prevailed in an investment arbitration brought by RTI Rotalin Gas Trading AG and Rotalin Gaz Trading S.R.L. under the ICSID Additional Facility Arbitration Rules, administered by the International Centre for Settlement of Investment Disputes (ICSID). Moldova was represented by SLV Legal, Bivol & Asociații and Lexters - Stănescu, Vasile și Asociații SCA, with support from ANRE and the Ministry of Energy. The Lexters team was led by Alexandru Stănescu, Partner. In its 2 October 2026 award, the tribunal in RTI Rotalin Gas Trading AG and Rotalin Gaz Trading S.R.L. v. Republic of Moldova (ICSID Case No. ARB(AF)/22/4) found that Moldova had not breached its obligations under the Energy Charter Treaty and rejected the claimants' financial claims of MDL 471.6 million, plus interest. The tribunal also rejected the claimants' request for reimbursement of an MDL 38.45 million administrative fine imposed by Moldova's National Agency for Energy Regulation (ANRE), finding that the sanction was neither contrary to the applicable legal framework nor arbitrary or unreasonable. The claimants were ordered to bear all costs of the arbitration. The dispute concerned the regulatory framework of Moldova's natural gas market and measures adopted by the competent authorities between 2000 and 2022. The claimants alleged, among other matters, breaches of Moldova's obligations under the Energy Charter Treaty in connection with the regulation of natural gas distribution and the treatment of their investments. Alexandru Stănescu, Partner at Lexters: “We wanted to invest our time and experience in a case of particular importance to Moldova, a country with close ties to Romania. Our objective was to support the members of our consortium of lawyers and to ensure together that the issues were tested rigorously on their merits and that Moldova received a strong international defence. We are pleased with the outcome and with the opportunity to have contributed to the ICSID proceedings.” Lexters' Investment Arbitration Experience Rotalin is the second ICSID investment arbitration in which a Lexters team led by Alexandru Stănescu has acted for a respondent State. Previously, Alexandru Stanescu of Lexters acted as co-counsel for Romania in Fin.Doc S.r.l. and others v. Romania (ICSID Case No. ARB/20/35), in which the tribunal, in its award of 16 January 2025, dismissed on the merits all claims brought by 44 solar investors seeking approximately EUR 243 million in relation to changes to Romania's renewable energy support scheme. The two matters reflect Lexters' experience in investor-State arbitration, energy and regulatory disputes and complex cross-border proceedings involving significant financial claims. About Lexters – Stănescu, Vasile și Asociații SCA Lexters - Stănescu, Vasile și Asociații SCA is an independent Romanian law firm advising companies, investors and sovereign States on complex domestic and cross-border disputes. Its disputes practice handles litigation and international arbitration under the rules of ICSID, ICC, UNCITRAL, JAMS, HKIAC and SIAC, with experience spanning investor-State disputes, commercial arbitration, energy and infrastructure, technology and financial disputes, regulatory matters, IP disputes and cross-border enforcement. The firm also handles art recovery and restitution disputes, including proceedings concerning artworks located in the United States and France. Lexters' broader practice covers technology, digital assets, fintech, IP, corporate/M&A, private equity and venture capital, allowing the firm to provide multidisciplinary advice in complex cross-border matters. Further information on the case: https://anre.md/index.php/republica-moldova-castiga-arbitrajul-investitional-initiat-de-rti-rotalin-gas-trading-ag-si-rotalin-gaz-trading-srl-3-1420 https://www.energie.gov.md/ro/content/republica-moldova-nu-va-plati-despagubiri-de-peste-471-de-milioane-de-lei-solicitate

Franchising can be a powerful route for scaling a business internationally, especially across the diverse markets of the European Union. The EU’s single market of 27 countries (450 million consumers) hosts around 8,500 distinct franchise brands, far more than the ~2,500 found in the United States. This growth comes with a challenge: Europe has no single franchising law, meaning each country imposes its own legal framework. Navigating this patchwork of local laws is crucial for corporate decision-makers and entrepreneurs planning to expand via franchising in Europe. Understanding Local Legislation in EU Markets No Unified EU Law – Know the National Rules: Unlike the U.S., which has federal franchise regulations, the EU lacks an overarching franchising statute. Each member state regulates franchising through its national laws (general contract, commercial, and competition laws, or specific franchise statutes). In-depth knowledge of each target country’s regulations is therefore essential for success. The absence of uniform rules means franchisors must adapt to varying definitions, requirements, and restrictions in each jurisdiction. National Franchise Laws – Key Examples: Many EU countries impose their own franchise-specific legislation or case-law principles, which can significantly impact how you operate The key we found most useful is our broad network of collaborators who can assist with local counsel in each country early. Laws can differ on defining a franchise, what must be disclosed, relationship terms, and even whether agreements need to be in the local language. Thoroughly researching local legislation (or hiring experts who know it) will help avoid violating local rules that could derail your expansion. It is important to mention that what “works” in one country might be illegal or unenforceable in another – franchising in Europe is not one-size-fits-all. Drafting Franchise Agreements Tailored to Each Jurisdiction Avoid the Copy-Paste Trap: When expanding internationally, franchisors cannot simply reuse their domestic franchise contract and assume it will hold up everywhere. Localized drafting is crucial. Franchisors who assume one standard agreement is “equally enforceable everywhere” may face a nasty surprise. Instead, tailor your franchise agreements to reflect each jurisdiction’s legal requirements and business norms. Key Considerations in Localizing Contracts: When drafting country-specific franchise agreements, the following factors are very important: Mandatory Legal Provisions: Country-specific clauses required by law must be included. For instance, French franchise contracts should explicitly grant trademark usage rights and include know-how transfer (as noted for the Loi Doubin definition). Italian agreements must respect the 3-year minimum term and include explicit territory and royalty details. Failing to include such terms can make the agreement non-compliant or even void in those jurisdictions. Disclosure and Waiting Periods: The contract signing timeline must aligns with local disclosure laws and cooling-off periods. If a jurisdiction requires a 30-day disclosure period (like Italy) or a 20-day cooling-off period (like France and Spain), the timelines must be built acordingly into the contract process. Language and Cultural Fit: While many international franchise contracts use English, it could be necessary to translate the agreement or key parts into the local language. Many franchisees (and the courts) will expect the contract in their native language and governed by local law. A contract not understood by the franchisee or not in the required language could be challenged. Choice of Law & Forum: Specify governing law and dispute forum in each contract. Many franchisors default to their home country’s law for consistency; however, this may not override certain mandatory local laws designed to protect franchisees. Some countries’ franchise laws or public policy will impose local law or jurisdiction for certain matters despite what the contract says. Ensuring Contract Enforceability Across Borders Having a contract is one thing; being able to enforce it in a foreign jurisdiction is another. To maximize the likelihood that the franchisor rights (and remedies) can be upheld internationally, the following strategies should be considered: Governing Law vs. Local Law: Under EU rules (the Rome I Regulation), parties generally can choose the law governing their contract. Many franchise agreements pick the franchisor’s home law for consistency. However, this choice cannot override certain mandatory local laws enacted to protect franchisees or business dealings in that country. For example, if French law grants a franchisee certain non-waivable rights, a clause saying the contract is governed solely by U.S. law won’t strip the French franchisee of those protections. To ensure enforceability, either the contract must comply with those local mandatory rules regardless of the chosen law, or explicitly acknowledge them in the contract. Jurisdiction and Venue: Clearly state which courts (or arbitral tribunals) will handle disputes. The Brussels I Regulation in the EU generally upholds exclusive jurisdiction clauses between businesses, and a judgment from one EU country is directly enforceable across all EU member states. This means that if the franchisor obtains a court judgment in France against a franchisee, it can be enforce in Germany or Italy relatively easily via EU mechanisms. Alternatively, some franchisors opt for international arbitration as the dispute forum – arbitration awards can be enforced globally under the New York Convention, and it avoids any home-court advantage for either side. Compliance with Disclosure and Registration Requirements One of the most distinctive legal aspects of franchising is the requirement in many jurisdictions that franchisors disclose certain information to prospective franchisees before any agreement is signed or payment made. In the EU, disclosure rules vary by country, so compliance is a moving target. Key points include: Pre-contractual Disclosure Documents: A number of EU countries have laws compelling franchisors to provide a detailed information document to the potential franchisee well in advance. This often includes information about the franchisor’s business, financial status, the franchise network, intellectual property, fees, training and support provided, and other key terms. For example, France’s Loi Doubin requires a disclosure document (DIP) be given at least 20 days before signing the contract Italy similarly mandates a disclosure document 30 days before contract signing by com. Spain imposes at least 20 days between providing a full draft contract and signing, effectively a cooling-off periodfranchising.eu. Belgium, Sweden, Romania and several other countries also enforce pre-contract disclosure by statute. Failing to comply can have serious consequences – the franchisee may be able to void the contract or even claim damages if misled. Registration Requirements: While most EU countries do not require franchisors or franchise offerings to be registered with the government, a few do (or did in the past). For instance, Lithuania requires that the franchise agreement be registered in the Register of Legal Entities where the franchisor’s or franchisee’s business is registered. Managing Intellectual Property and Brand Control Across Borders The franchise’s value is inseparable from its brand – trademarks, logos, know-how, and the consistent customer experience that is offered. As one franchising expert noted, franchise systems “stand or fall on the reputation of their brands and the quality and consistency of their product and service offerings”. When expanding into multiple EU countries, protecting the intellectual property (IP) and maintaining brand consistency is paramount and the following are essential: Securing the Trademarks in the envisioned teritory. Clear License of Rights in the Franchise Agreement Maintain Quality Control to protect the brand’s reputation. Protect Know-How and Trade Secrets. Brand Adaptation vs. Consistency: While consistency is crucial, franchisors should also think about local cultural and legal adaptation of the brand where necessary. Important Aspects that can generate risk Choosing the wrong franchisee or master franchise partner can lead to conflicts, underperformance, or worse, legal battles. Distant franchisees are harder to monitor – as one expert put it, the “tyranny of distance, time zones, [and] cultural differences” can combine to increase risks and reduce control for the. The implementation of a rigorous franchisee selection and training process is very important. It is importnat not to rush into partnerships just for quick expansion – it must be ensured that the franchisee understands the franchise system and is financially and operationally capable of executing it. Maintaining regular communication and providing strong ongoing support can preempt many issues. In some cases, using area developers or joint venture models can give a local partner with “skin in the game” to help oversee units in a region, adding an extra layer of control and insight. A franchisee might misuse the brand (e.g. deviating from standards or using the trademark beyond the scope of their license), or third parties might copy the concept once it becomes popular in a new country. It is important to actively monitor the franchisees for compliance with brand standards. If a franchisee strays, address it immediately as per the contract (e.g. send notices of default, require them to cure deficiencies within a set time). For outside infringement (e.g. a copycat store or a confusingly similar brand popping up), work with local IP counsel to send cease-and-desist letters and take legal action if needed. Registering the IP (trademarks, copyrights for manuals or designs, etc.) in each jurisdiction before or as it is entered it is critical to being able to enforce the rights there. Enforcing Post-Termination Obligations: One risk area is when a franchise relationship ends. Will the franchisee actually cease using the brand and return confidential materials? Will they respect the agreed post-term non-compete period? To mitigate post-termination risks, it must be ensured that the contract gives the rights to take swift action – for instance, the right to enter the former franchisee’s premises to remove signage and branded materials, or clauses that allow injunctive relief if the franchisee doesn’t stop operating or violates non-compete terms. In the EU, courts can and do grant injunctions to enforce non-competes or IP rights quickly when necessary. Plan for the worst-case scenario in the contracts so you have the tools to protect the system if a franchisee goes rogue after termination. Conclusion Expanding a franchise into multiple countries is a complex endeavor, but with careful legal planning it can be hugely rewarding. With the right preparation and advice from experienced counsel, international legal landscape can be confidently navigated and the business can be scaled with success.