Collecting the award starts with the beginning of the cross-border transaction, franchising or otherwise. By building a strong foundation for enforcement of the contract, the existing but inadequate legislation and case law can be used to successfully collect foreign awards.

Draft With Enforcement in Mind

You are negotiating a transaction with a company that will be performing where you cannot watch it every day, perhaps even in a country that would be hostile to your client. Best practices would suggest that you conduct a background search on the principals of your counterparty. Assuming that no obvious character flaws are evidence, consider whether the counterparty has the demonstrated ability to perform, including the financial wherewithal. Make sure there is a financial representation as to their existing financial strength that serves as an inducement to the contract. Then, make sure that your contract provides a covenant that their financial condition will not deteriorate. We want the counterparty to represent that it will always be just as strong and will not engage in reckless borrowing during the performance phase of the contract.