Most franchisors have thorough financial vetting requirements before allowing any person or business to become a franchisee. However, how many of these same businesses perform compliance due diligence on their prospective overseas franchises? How many U.S. franchisors have compliance training programs? How many evaluate, on an ongoing basis, the compliance program of their overseas franchisees? How many U.S. franchisors have a compliance hotline or other reporting mechanism for any compliance violations made against their See more +

Most franchisors have thorough financial vetting requirements before allowing any person or business to become a franchisee. However, how many of these same businesses perform compliance due diligence on their prospective overseas franchises? How many U.S. franchisors have compliance training programs? How many evaluate, on an ongoing basis, the compliance program of their overseas franchisees? How many U.S. franchisors have a compliance hotline or other reporting mechanism for any compliance violations made against their franchisees?

Three key takeaways:

1. Franchises can bring an unexpected level of FCPA exposure.

2. Franchisors must have more than financial vetting for potential franchisees.

3. Use your compliance tool kit for business ventures in managing the FCPA risk for franchises. See less -