Protectionism in the franchising services industry

Many countries, particularly developing countries, do not allow the establishment of franchise companies which are fully foreign-owned. Furthermore, a number of developing countries require foreign firms to disclose know-how and technology before franchising operations are permitted. Firms may, for instance, be required to lay open the process technology used in fast-food production. In other cases, the allocation of foreign exchange for remittances of royalties and other earnings is made dependent on how much know-how is transferred to the franchise holder under the franchise agreement.