MEXICO Law and Practice Contributed by: Gustavo A. Alcocer, Luis Astorga, Isabella Montero Torres and Fernanda Martínez Zolezzi, OLIVARES
3. Franchise Registration 3.1 Mandatory Registration
• the general amounts of payments and the expect - ed investment payback period; • the number of company-owned and franchised units; and • the number of units that have been opened, relo - cated, transferred or closed. The law does not prescribe a specific disclosure for - mat or a single mandatory method of delivery. From a legal standpoint, what is material is that the required information is provided within the statutory period and that delivery can be duly evidenced. 2.2 Consequences of a Failure to Disclose With respect to lack of compliance with the disclosure obligation, applicable Mexican law provides for con - sequences in two principal circumstances. • First, where the disclosed information is inaccu - rate or untrue, the franchisee may seek the nullity of the franchise agreement and claim damages arising from such non-compliance. The franchisee may exercise these rights within one year from the execution of the franchise agreement. After such period, the franchisee may only seek nullity of the agreement. • Second, failure to provide the required disclosure information may also result in the nullity of the franchise agreement, as well as an administrative infringement resulting in penalties, provided that the applicable statutory period has elapsed and the franchisor has been formally requested to provide such information. 2.3 Franchise Disclosure Exemptions There are no exemptions from the disclosure obliga - tion under Mexican law. 2.4 Franchise Disclosure Language/ Translation Requirements Mexican law does not expressly require pre-contrac - tual disclosure information to be provided in Spanish. However, as a matter of practice, it is advisable to either provide a Spanish version or include a state - ment in the English version confirming that the fran - chisee understands the contents of the document or has obtained appropriate legal advice regarding its contents.
A franchisor is not required to obtain any prior regis - tration or governmental approval in order to offer or operate a franchise in Mexico. Mexico does not have a separate franchise registration law; rather, franchises are regulated under the LFPPI, which governs, among other matters, franchise disclosure requirements, the minimum contents of franchise agreements and the possibility of recording a franchise with the Mexican Institute of Industrial Property ( Instituto Mexicano de la Propiedad Industrial – IMPI). Neither the franchisor nor the FDD is required to be registered or filed with IMPI as a condition to offer or operate a franchise in Mexico. A franchise agreement may nevertheless be recorded with IMPI. Such record - al does not constitute authorisation to offer or operate the franchise, and the agreement remains valid and binding between the franchisor and franchisee without it. However, in many instances recordal is required for the agreement to be enforceable against third parties. 3.2 Franchise Registration Process Where the parties elect to record the franchise, either the franchisor or the franchisee may file the applica - tion with IMPI. The application must identify both par - ties and state the franchisee’s nationality and address. It must be accompanied by an original or certified copy of the franchise agreement bearing the parties’ signatures. To protect commercially sensitive information, the copy submitted to IMPI may omit provisions con - cerning royalties and other considerations, confiden - tial information relating to the methods or channels used to distribute and market the relevant goods or services, and technical-information annexes. The application must be signed and comply with IMPI’s general filing requirements. These include use of the applicable official form, payment of the gov - ernment fee, a Mexican address for notices, an email address, evidence of the signatory’s authority where applicable, Spanish translations of foreign-language documents, etc. Applications may be submitted phys - ically or through an electronic service made available
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