MEXICO Law and Practice Contributed by: Gustavo A. Alcocer, Luis Astorga, Isabella Montero Torres and Fernanda Martínez Zolezzi, OLIVARES
by IMPI; electronic submissions must use a signature recognised by the Institute. An unsigned application is dismissed without an opportunity to cure. If proof of payment is missing, the applicant is given five business days to provide it. Other formal deficiencies generally carry a two-month cure period. For deficiencies concerning the specific franchise- recordal requirements, IMPI issues a single office action, and the applicant has two months, beginning on the business day after notice takes effect, to cor - rect them. An incomplete or late response results in dismissal. IMPI must decide the application within two months from filing or, if a deficiency was raised, from the date on which the last requirement was satisfied. 3.3 Consequences of a Failure to Register Because recordal is optional, failure to record a fran - chise agreement does not invalidate the agreement, prevent the franchise relationship from commencing or, by itself, give rise to a franchise-specific fine. The agreement remains valid and binding between the franchisor and franchisee. However, without recordal it does not have effect against third parties, meaning that it cannot be asserted against anyone outside the contractual relationship. Nevertheless, recordal is advisable, particularly where the franchisor does not have a direct presence in Mex - ico, since it may serve as evidence that the franchisee is authorised to use the franchisor’s trade mark in Mexico and may assist the franchisor in demonstrat - ing use of the trade mark, including for purposes of the declaration of use or in the event that such use is challenged.
before granting a franchise. A start-up or relatively new business is therefore not legally prevented from franchising solely because it lacks a prescribed oper - ating history or profit record. However, the Regulation of the Federal Law for the Protection of Industrial Property ( Reglamento de la Ley Federal de Protección a la Propiedad Industrial – the “Regulation”) requires disclosure of information concerning: • the franchisor’s operating history; • the structure from which the franchise derives; • general payment amounts and anticipated invest - ment-recovery periods; • the number of company-owned and franchised outlets; and • the number of outlets opened, relocated, trans - ferred and closed. These are transparency requirements, not eligibility tests: neither the LFPPI nor its Regulation prescribes a minimum business age, outlet count or level of profit - ability. Voluntary industry-certification schemes may apply separate commercial criteria, but they are not legal prerequisites to franchising in Mexico. 5. Duration, Renewal and Termination 5.1 Duration of a Franchise Agreement Mexican law does not prescribe a minimum or maxi - mum duration for a franchise agreement. The par - ties may therefore agree on either a fixed term or an indefinite term. Notwithstanding the foregoing, the statute expressly contemplates that if the franchise agreement is entered into for an indefinite term, then either party may terminate the relationship unilaterally without cause. 5.2 Franchise Renewal Mexican law does not grant a franchisee an automatic statutory right to renew a franchise agreement when its fixed term expires. The LFPPI regulates the matters that must be addressed in the agreement and restricts its early termination, but it does not require the fran- chisor to grant a new term upon expiry. Renewal rights, eligibility conditions, notice periods and renewal fees
4. Other Requirements 4.1 Past-Profitability Requirements
Mexican franchise law does not require a franchisor to have operated for a minimum period, maintain a minimum number of outlets, demonstrate a history of profitability or satisfy a specified financial threshold
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