Spice management for restaurant partners

India’s robust economic development, rapidly growing middle-class and rising global brand awareness in the past few decades have resulted in a number of international chains taking a keen interest in the domestic restaurant industry.Spice management for restaurant partners The relationship between an international franchisor and its local franchisee is very much based on trust and of paramount importance in the Indian context. Any franchisor looking to succeed in the domestic market should closely look at a number of legal and commercial factors, including but not limited to the domestic legal framework and dispute resolution procedures.Spice management for restaurant partners As the Indian franchise sector is at a relatively nascent stage, there is no specific law or exclusive government agency that regulates the industry. The franchise relationship is therefore governed by a range of statutes, rules and regulations, in addition to commercial principles agreed between the parties in their franchise agreement. Key domestic legislation that international franchisors should be aware of include: the Indian Contract Act, 1872, which governs the contractual aspects of franchise agreements; the Consumer Protection Act, 1986, which provides remedies to consumers for defective products; the Competition Act, 2002, which restricts anti-competitive practices; and the civil and criminal procedure codes, which enumerate the process followed by courts during civil and criminal trials, along with applicable legal precedents set by the Supreme Court. However, in almost all cases, termination of the franchise agreement or taking the dispute to an arbitral tribunal or court should be considered as a last resort, or a “nuclear option”. Considering the procedures followed by courts and other judicial forums, disputes in the country (as in many international forums) can be expensive, time-consuming and attract unwanted negative publicity. The ever-evolving relationship between international franchisors and franchisees has often been characterized as a marriage, with the brand being the “child”. Although a married couple may have differences and disagreements on occasion, they should ultimately always strive to work together as a team to ensure the growth, safety and well-being of the child. It is therefore crucial for international and domestic franchise parties to maintain open lines of communication, understand each other’s cultural differences, conduct discussions in a collaborative manner, and always face issues head-on, with the primary aim of strengthening their bond and developing the brand. Enriching franchisee know-how and capability by way of regular engagements, training sessions and sharing of best practices can go a long way in nurturing this relationship.