Country-Specific Legal Challenges in Restaurant Expansion
Understanding How Real-World Law Shapes Global Success
Expanding your restaurant internationally tests every part of your business—from operations and supply chains to culture, finance, and, of course, the law. International expansion is more than translating your brand or replicating your menu.
As lawyers with decades of experience in cross-border business development, we’ve seen the full range of legal pitfalls and procedural complexities that companies—including restaurants—face when they go global.
In this blog series, we explore the legal substance of what international expansion really requires, while also weaving in the operational and strategic decisions that must align with your legal framework.
Whether you’re taking your first steps abroad or looking to solidify a presence already in motion, this six-part series equips you with the insight to proceed with confidence and foresight. We cover:
Part 1: Legal Considerations for Structuring Your Restaurant Abroad
Part 2: Navigating Regulatory, Licensing, and Financial Requirements
Part 3: Employment, Data Privacy and Consumer Protection
Part 4: Intellectual Property Considerations
Part 5: Real World Nuances in Law and Application
Part 6: How to Use Legal Counsel When Expanding Internationally
Country-Specific Legal Nuances
While the overarching principles of international expansion remain consistent—structure carefully, comply locally, protect your brand, and manage risk—each jurisdiction presents its own regulatory challenges. As we covered in Parts 1–4, understanding these nuances is critical, especially for restaurant operators who face multi-layered compliance obligations at national, provincial, and municipal levels.
Here are examples of country-specific legal issues that frequently affect hospitality businesses:
Japan
Japan maintains stringent food labeling laws, including mandatory disclosure of allergen content and country of origin for key ingredients. These requirements are enforced rigorously and must be addressed at the menu development and procurement stages. In addition, Japanese labor law imposes complex requirements regarding working hours, overtime compensation, and mandatory rest periods. Employers must document and monitor working conditions carefully to avoid penalties.
Canada
Canada’s legal framework is heavily decentralized, with provinces setting their own liquor licensing, food safety, and labor regulations. For example, liquor license quotas and application procedures vary considerably between Ontario and British Columbia. Food safety certifications, inspection regimes, and public health rules are likewise province-specific, necessitating localized legal support.
Singapore
Singapore enforces strict food safety standards, with routine inspections by the Singapore Food Agency. Restaurants are required to adhere to detailed hygiene codes and risk suspension for violations. The country’s labor laws emphasize contractual clarity; employment contracts must comply with the Employment Act and address items such as working hours, benefits, and termination procedures in detail.
Australia
Australia emphasizes consumer protection. Misleading or deceptive advertising—particularly regarding menu items, ingredients, and pricing—can trigger enforcement actions under the Australian Consumer Law. Additionally, franchising is highly regulated under the Franchising Code of Conduct, which mandates pre-contractual disclosure, cooling-off periods, and dispute resolution protocols.
Mexico
In Mexico, municipal regulations can pose significant challenges. Building codes, sanitation standards, and zoning restrictions vary not only by city, but sometimes by neighborhood. Its employment laws often impose mandatory profit-sharing with employees, as well as compliance with detailed employment benefit requirements. Collective bargaining agreements are common in certain regions and sectors. At least two Mexican lawyers have jokingly told us that foreign companies should be more concerned with Mexico’s employment laws than with its cartels.
United Kingdom
Post-Brexit, the United Kingdom operates under a domestic version of the GDPR (referred to as UK GDPR), which mirrors the original EU regulation but requires separate compliance systems. Food safety is governed by the Food Standards Agency, and operators must comply with inspection protocols, labeling standards, and traceability requirements. Additionally, restaurants that import ingredients from the EU now face new customs and documentation procedures.
Real-World Case Studies: When Theory Meets Practice
The following real-world case studies illustrate how legal planning, local governance, and cultural nuance intersect—and occasionally clash—during international expansion.
China: The Multi-Entity Approach
A U.S. fast-casual chain sought to expand nationally in China via a single WFOE (wholly foreign-owned enterprise) in Shanghai, with branches in other major cities. But regulatory interpretations and administrative processes varied city to city. Health permits, local inspections, and banking requirements proved inconsistent and slow.
After six months of friction, the company pivoted to establishing separate legal entities in each target city. Though this increased up-front complexity, it unlocked faster local approvals and smoother relationships with regulators. Within 18 months, they were operating in all four cities.
Lesson: Oftentimes, the most “streamlined” legal structure may not be the most effective. A decentralized, city-by-city approach often aligns better with local governance.
Russia: Navigating Local Power Dynamics
Before geopolitical developments closed the Russian market to many Western brands, a U.S.-based coffee chain secured licenses, leases, and branding compliance to open in Moscow. But they overlooked local power dynamics.
A politically connected businessman filed a dubious trademark lawsuit days before the launch of their first store, triggering a fast-tracked court hearing. Rather than risk delays, the company donated to a local hospital, and hosted a public ceremony with Moscow’s Deputy Mayor. And shocker of shockers, it all of a sudden became very easy to settle the dubious trademark lawsuit.
Lesson: Legal compliance is essential, but not always sufficient. In some markets, success also depends on navigating informal influence structures and engaging local stakeholders early, in a way that does NOT involve any illegal payments.
Industry-Specific Nuances: Where Food Meets Law
Below are several examples where culinary, cultural, and legal considerations intersect—and where even subtle missteps can have legal consequences.
Menu Adaptation and Regulatory Compliance
- Ingredient Restrictions: A popular American burger chain discovered that its signature sauce contained a spice banned under South Korean food regulations. Rather than pursue a regulatory exemption, the company reformulated the sauce using locally approved ingredients to achieve a similar flavor profile.
- Nutritional Information and Allergen Disclosure: Under EU Regulation No. 1169/2011, restaurants must provide comprehensive allergen information to customers. One fast-casual salad concept learned this the hard way when its QR-code-based allergen disclosures were deemed non-compliant due to the lack of physical signage or printed menus.
- Health Claims: A U.S.-based smoothie chain was required to remove health-related claims such as “immunity-boosting” and “detoxifying” from its Singapore menus. Local law mandates scientific substantiation and prior approval for any health claims.
- Religious Certification: In many Muslim-majority markets, Halal certification is often a prerequisite for mainstream success. Several international chains have redesigned kitchen layouts, overhauled supplier relationships, and implemented specialized staff training programs to meet Halal standards.
Operational Adjustments to Meet Local Requirements
Even the most routine aspects of restaurant operations may require recalibration abroad. For example:
- Tipping and Service Charges: In Australia, U.S.-style tipping models often conflict with the Fair Work system, which mandates transparent compensation structures. Most foreign restaurant chains opt to implement all-inclusive pricing to simplify compliance.
- Opening Hours and Labor Scheduling: A 24-hour diner concept entering Germany was forced to revise its business model due to restrictions premium pay requirements for late-night and weekend labor.
- Delivery Services: A U.S. pizza chain expanding into Southeast Asia found that directly employing delivery drivers triggered complex licensing and insurance requirements. The company pivoted to working with licensed third-party delivery providers who were already compliant with local laws.
- Alcohol Service: In Sweden, restaurants must ensure that all staff involved in alcohol service complete government-certified training. Managers may bear personal liability for violations, making U.S. training protocols insufficient.
Conclusion: How to Get Local Nuance
Knowing the laws isn’t enough—you need to understand how they’re applied, interpreted, and enforced on the ground.
Our firm has long-standing relationships with top-tier legal counsel in at least 50 countries, and our global legal network spans nearly every major jurisdiction.
For restaurant groups going abroad, our role is typically to coordinate multi-jurisdictional teams, align legal strategies with business goals, and control costs without compromising quality.
This approach delivers three major benefits:
- Consistency: Central coordination ensures aligned strategy across markets
- Quality Control: We supervise local counsel and ensure high standards
- Cost Management: We reduce redundant billing and optimize legal spend
Our clients almost invariably achieve faster market entry and lower overall legal costs compared to managing multiple firms directly.
Coming Up in Part 6: How to Use Legal Counsel When Expanding Internationally
In our final installment, we’ll explain how to strategically leverage legal advisors—both at home and abroad—to protect your interests, avoid costly missteps, and maximize the ROI of your international growth.
