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Russia

Franchising

Including: No pre-franchise disclosure requirements; Minimum content of franchise agreement; Registration; Franchisor liability; Restrictions on termination rights; First refusal rights; Policing trademarks; Resale price maintenance, non-compete provisions and refusal to deal; No registration deadlines; Exclusive licence not equivalent to exclusive use; Choice of law.

Russia's highest commercial court, the Supreme Arbitrazh Court, recently ruled that where a franchisor with a Russian-registered trademark grants a franchisee an exclusive licence to use that trademark within a defined territory, the exclusive licence does not, by itself, prohibit the franchisor from also using its trademark in that territory.

A number of business-friendly amendments to the Civil Code will come into force shortly, improving the franchising framework in Russia and simplifying market entry for non-Russian companies. However, despite these positive changes, two significant restrictions will remain in effect.

The Russian State Duma recently gave preliminary approval to a number of business-friendly amendments to the Civil Code regarding franchise agreements. These amendments, which will almost certainly become law, will align Russia more closely with the West with respect to franchise law and will simplify market entry for non-Russian companies intending to conduct franchise operations in Russia.

Although all franchise agreements in Russia must be registered, franchisors and franchisees can commence operations without registration and register their agreement with retroactive effect, sometimes years later. However, deferring registration can have serious disadvantages for a franchisor.

Including: Licensing and IP rights; Choice of law and statutory mandates; Possible work-arounds.

Media & Entertainment

Russia has a well-established legal framework for advertising and promotion. The general 'truth in advertising' requirements are straightforward and compliance is simple. However, the regulations for contests and sweepstakes are strict and present more of a challenge for both Russian and foreign companies.