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Foreign Corrupt Practices Act Presents New Risk for Franchisors

No U.S. franchisor has faced an action brought against it under the Foreign Corrupt Practices Act (“FCPA”), a 35-year-old law that prohibits U.S. firms and individuals from bribing foreign government officials. But Eric L. Yaffe, principal with Gray Plant Mooty, predicted that “it's just a matter of time” before a franchisor is accused of a violation, given the rapid expansion of international franchising operations and the very aggressive enforcement of the FCPA that began about a decade ago.

That blunt assessment was the motivation for a session about the FCPA at the International Franchise Association's 45th Annual Legal Symposium in Washington, DC, in May. Yaffe was joined by Sarah M. DiLorenzo, senior counsel for McDonald's Corporation, and Mary C. Spearing, partner, Baker Botts, L.L.P., for a discussion of the FCPA and anti-corruption laws in Canada and the UK.

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