Taking Your Restaurant International: A Legal Guide to Global Restaurant Expansion

International restaurant expansion often generates legal problems before anyone believes there is much legal work to do. A team finds a location and negotiates the lease before confirming that the hours, the liquor service, and the patio are permitted at that address. An executive chef flies in to train the kitchen on a visitor stamp. The market announcement goes out before anyone searches the local trademark register. The kitchen equipment package ships before anyone asks whether American-certified equipment can lawfully be installed in a European commercial kitchen.

None of those are exotic legal questions. They are expensive ones, because by the time they surface the company has committed money, published dates, or given up leverage. The legal work then costs more, not because the analysis grew harder, but because the business has fewer choices left.

1. Answer the Feasibility Question Before You Pay for the Market Study

We once worked with a U.S. company that spent hundreds of thousands of dollars researching the China market before asking whether it could legally conduct its proposed business there through a wholly foreign-owned entity. At the time, it could not. In another matter, a company bought roughly $3 million in equipment for a China operation believing the equipment would count toward its required registered capital. It had not followed the necessary procedures before the purchase, and it then had to produce another $3 million in cash to meet its registered capital requirement.

For a restaurant, the feasibility questions are unusually concrete, which is what makes skipping them so costly. Can a foreign-owned entity hold the operating licenses your concept requires, or must the liquor license sit with a local resident or locally controlled company? Can you sell alcohol during the hours your margins assume, and does anyone pouring it need a certification your U.S. training program does not satisfy? Can you import the ingredients the menu is built on, and if the answer involves meat or dairy, do you know what veterinary certification adds to cost and lead time? Does local franchise law change the relationship you intend to have with an operator?

We once advised a client taking a 24-hour concept into Germany, where premium pay and rest requirements for late-night and weekend work made round-the-clock operation uneconomic. The operating hours that defined the business at home did not survive the German cost model.

Our Doing Business Internationally: 10 Things to Get Right covers this sequencing problem across industries.

2. What This Looks Like on a Calendar

Timing is what companies often get wrong, so it is worth setting out the sequence we would use for a first restaurant in a new country, working backward from opening day. The intervals vary by country and city, and one difficult license can throw off the entire schedule. Treat these as planning assumptions to be replaced with local answers.

Twelve months out and earlier. Start trademark searches and filings in your target market, along with the obvious local-language variants, domains, and handles. Registration can take many months and may still be pending on opening day. Settle the entry structure and run the feasibility questions in Section 1 above, because both determine who can sign what follows.

Nine to twelve months out. Form the operating entity and begin the bank-account process at roughly the same time. Formation is often fast. Opening a functioning account for a foreign-owned company may not be. Beneficial-ownership verification, source-of-funds review, and compliance sign-off can take far longer than management expects. Payroll, vendor payments, and other parts of the opening plan may depend on that account, so banking deserves a place on the critical path.

Six to nine months out. Move to site selection and lease negotiation, with licensing and permitting contingencies written into the lease. In parallel, submit architectural and mechanical plans and file licenses tied to the premises. If a liquor license depends on a particular address, you may need the site before you can apply, which is exactly why the lease must protect you if the license does not come.

Four to six months out. Work through buildout permits, equipment specifications and imports, immigration filings for headquarters personnel involved in the opening, supplier agreements, and the point-of-sale decision. Immigration processing can take weeks or months depending on the country and visa category, and in many markets the local entity or employer registration must be in place before sponsorship can proceed.

Two to four months out. Hire and paper the local workforce on locally drafted documents, complete food-safety registration and any required HACCP documentation, bind insurance on the local entity, and finish the privacy work, including the vendor agreements behind your reservation and loyalty systems.

Final sixty days. Complete inspections, obtain final licenses, train the staff, and make the public announcement. If the trademark work was left until this stage, you may be learning about a preventable brand problem at exactly the wrong time.

A trademark issue that was inexpensive to address a year earlier can become a cancellation proceeding as opening approaches. A delayed bank account can hold up payroll registration, which can hold up immigration filings, which delays the chef, which delays training, which moves the opening past a lease commencement date you are already paying against. International expansion is full of risks like these.

3. Someone Has to Own That Calendar

No U.S. lawyer can credibly claim command of the employment, real estate, licensing, tax, and food-safety rules of every country you might enter. You will need good local lawyers, and you also need someone whose job is to handle the entire legal picture, because many failures are failures of coordination.

We see this constantly in our trademark practice. A company uses one firm for filings in several foreign markets and another for the United States, then discovers that the recorded owner, the goods-and-services descriptions, and the filing assumptions do not align. Every lawyer may have done competent work inside their own jurisdiction, but the overall portfolio still makes no sense, and fixing it costs more than doing it right would have.

Restaurant expansion multiplies that problem across more areas of law. Your entity choice drives your tax exposure. Your lease drives your licensing risk. Your immigration timeline may depend on employer and payroll registrations, which in turn depend on the entity. Your franchise structure can determine who controls customer data and who answers a privacy regulator. A specialist can answer one question perfectly and still put you in the wrong place if nobody is watching the others. We take up the underlying problem in Why Your International Lawyer Should Handle Your Domestic Work Too.

4. Choose the Structure Around the Business You Intend to Build

The realistic options are a locally incorporated subsidiary, a branch, a franchise or master franchise, or a joint venture with a local partner. The choice determines who signs the lease, employs the staff, holds the licenses, opens the bank accounts, takes the revenue, and carries the operating liability. It also affects your tax position, your control over the concept, and how hard it will be to leave.

A subsidiary is a separate company formed under local law, usually wholly owned by your foreign parent company. If you intend to own and operate, this is normally the practical answer because the local company can hold everything in its own name and separate incorporation ordinarily creates a liability boundary. That boundary is not absolute: parent guarantees, local veil-piercing doctrines, and direct parent conduct can all reach through it. It still matters in a business that combines long leases, a large hourly workforce, alcohol service, and food-safety exposure under one roof. The subsidiary also gives you control over menu, sourcing, design, and standards that a franchise relationship cannot.

The costs are administrative. Local entities carry their own tax, accounting, payroll, and reporting obligations, and some countries impose capital requirements. A German GmbH requires minimum share capital of €25,000, with at least €12,500 generally contributed before registration. Our guide to forming a company in Mexico runs the same analysis in a major restaurant market.

A branch is an extension of the foreign company rather than a separate legal entity, which can suit a limited or temporary presence and occasionally a particular tax position. Liabilities incurred through the branch generally reach the parent directly, and that fact often settles the question. One American client came to us preferring a branch in Europe because formation looked simpler and cheaper, then reversed course once it understood that the parent would answer directly for the branch's debts and obligations. It accepted the additional setup work and formed a subsidiary.

Ask as well whether one entity actually covers the country. A U.S. client planned its China expansion around a single Shanghai company operating its restaurants as branches in other cities. Permits, inspection practice, banking, and everyday administrative treatment varied enough from city to city that the branch model created friction in every new location, and the client ended up establishing a separate entity in each target city. For a restaurant, the permit that usually varies locally is often the health permit, which is also one you usually cannot open without.

Franchising expands the brand with far less of your own capital, and a well-chosen franchisee brings knowledge of landlords, suppliers, regulators, and local hiring that you would otherwise buy expensively and slowly. The trade is control. Customers do not distinguish between a company location and a franchise when the food is bad or the kitchen is filthy, so legal responsibility and reputational responsibility can end up in different places.

International franchising also requires real local drafting. Translating your U.S. franchise agreement is not a strategy. France requires qualifying franchisors to deliver a pre-contractual disclosure document, the Document d'Information Précontractuelle, together with the proposed contract at least 20 days before signing or, where applicable, before a covered pre-contract payment. Australia operates under a mandatory Franchising Code of Conduct governing disclosure, agreement terms, termination, and restraints. Other countries add their own registration, exclusivity, and termination rules, some of which cannot be contracted around.

Structure gets decided when everyone expects the market to work, which is exactly when you should test what happens if it does not. Although the overwhelming majority of McDonald's restaurants worldwide are franchised, a majority of its Russian restaurants were company-owned when it decided to leave following the invasion of Ukraine, and it sold the entire Russian portfolio to a local buyer. Direct ownership was not a mistake because politics later changed; company ownership bought control that franchising would not have. The narrower lesson is that leases, employees, and owned assets are what you have to unwind, and you should price that at the front end. We cover related trade-offs in So Many Choices for Selling Your Products into China.

5. Check the Location, and the Kitchen You Intend to Put in It

A client of ours found what everyone agreed was the ideal space and was deep into lease negotiations before learning that an obscure local ordinance prohibited the late-night operation the concept was built around. That discovery is cheap in week one of a site search and expensive in week nine of a lease negotiation, which is why the licensing review has to run alongside the real estate work rather than behind it.

The review has to go well past whether restaurant use is permitted. A wine bar open until one in the morning raises different questions from a breakfast café at the same address. Hours, alcohol, and outdoor seating may be governed by different authorities on different timelines, and in some places a liquor license is quota-limited, tied to a resident license holder, or unavailable within a specified distance of a school or place of worship. Noise approvals deserve particular attention in dense residential districts, where a variance process can consume an opening schedule.

Licensing problems become lease problems, so put the contingency in the lease. If you cannot obtain an approval your concept depends on, the lease should say what happens next. An exit right or rent abatement tied to a permitting failure can be worth many times the hour spent negotiating it. We had a client that signed a long-term lease before discovering that zoning prohibited the business it intended to operate there. It ultimately chose not to enter the country and accepted the risk of a lease claim. The landlord did not pursue it in the United States, though it certainly could have.

Operators who open restaurants routinely at home get hurt because the kitchen process overseas can look familiar. Have the architectural and mechanical drawings checked against local requirements for ventilation and grease extraction, gas supply, grease interception and floor drainage, and occupancy and egress driven by your seat count. Then check the equipment before you order it.

Many categories of commercial kitchen equipment built for the U.S. market cannot lawfully be used in the EU market unless they satisfy the applicable EU product and conformity requirements. Voltage, gas type, and water connections can create separate problems even when the equipment itself is compliant. Lead times are long enough that finding this in month four is a very different problem from finding it in month eight.

Have local counsel read the design where the brand depends on it. We had a client whose spaces were built around large-scale murals and ran into local decency standards in a Middle Eastern market because religious motifs in the artwork were not permissible there. It rebuilt the interiors with local artists in a way that held the brand identity without the offending content.

6. Menu, Ingredients, and the Rules That Reach the Plate

Operators tend to think about food regulation as health inspection. Internationally, it reaches further back into the business, into sourcing, menu writing, and training.

Take up ingredient rules while the menu is still in development because a restriction on one ingredient moves sourcing, cost, preparation, and staff training together. We had a client discover on the way into South Korea that its signature sauce contained an ingredient South Korean regulations did not permit. Rather than pursue an exemption on an opening timeline, it reformulated with approved ingredients and worked to hold the flavor. Fortunately, it was able to fix this problem soon enough not to delay its opening.

Allergen disclosure reaches the customer directly and applies to food served unpackaged, which is where American practice can fall short. EU Regulation No. 1169/2011 requires allergen information for specified allergens, including for non-prepacked food sold in restaurants, and local implementation can affect how that information must be made available. A client of ours relied on QR codes to carry its allergen information and found that insufficient because the required information was not also available through printed menus or physical signage. A digital-first disclosure strategy can contain every correct fact and still fail if it does not comply with the local method of disclosure.

Menu translation needs legal review, not just culinary review, because descriptions make claims, and a claim that reads as ordinary marketing copy at home can be a regulated representation abroad. Origin terms are a common trap: a protected designation is a legal term with an owner, and calling something Parmigiano Reggiano or Champagne on a European menu when it is neither can create a legal problem. Have counsel read the translated menu as a set of representations rather than as prose.

Where Halal, Kosher, or another certification matters legally or commercially, build it into the development plan rather than the pre-opening checklist. These sorts of requirements reach kitchen layout, equipment and storage, the supplier list, and staff training.

7. Build Your Employment Model for the Country Where the Work Happens

Employment law produces one of the sharpest gaps between American restaurant assumptions and foreign reality, and it hits restaurants particularly hard because labor is such a large share of the cost line.

American-style at-will employment is unusual outside the United States. Termination is commonly constrained by rules on cause, notice, procedure, and severance, while working-time limits, paid leave, and employer social contributions are frequently mandatory and more expensive than U.S. employers model.

Two hospitality issues repeatedly surprise American operators. In parts of Europe and Latin America, sector-wide collective agreements can set wages and working conditions for restaurant employees beyond what appears in an individual offer letter. The U.S. tipping model also does not travel well.

Delivery deserves its own analysis. We had a client expanding in Southeast Asia find that employing its own delivery riders created licensing and insurance complications it had not encountered at home, and it moved to licensed third-party providers. Vehicle licensing, rider insurance, and worker classification are all live questions in markets where two-wheeled delivery is the norm, and the answers affect both cost and liability.

Draft the employment documents for the jurisdiction where the employee works. Translating an American agreement does not localize it if the substantive terms still assume American law. For a concrete example, see our Translating Contracts into Chinese Does Not a China Contract Make.

The China Employment Agreements That Selected Washington Law

One U.S. company came to us after roughly a dozen of its China-based employees threatened lawsuits. Management sent us the employment agreements it had been using. They were entirely in English, they selected Washington State law, and they required disputes to be resolved in Washington.

The company had made those choices deliberately, having concluded that Chinese employment law was too employee-friendly. Choosing Washington law did not remove employees working in China from China's mandatory labor rules. Chinese law provides that labor contracts are governed by the law of the employee's place of work. The choice-of-law clause did not displace the law that actually governed. Our client was left facing multiple lawsuits with employment contracts that provided far less protection than management thought.

When it comes to China, it virtually always makes sense to employ people using China-specific documents, in Chinese or bilingual form, tailored to the employee's actual location. See China Employment Contracts: Localization Is Key. This need for contract localization holds true pretty much everywhere.

Immigration Belongs in Your Staffing Plan, Not Your Travel Plan

Restaurant openings depend on headquarters people. Your executive chef trains the kitchen. Your operations team installs your systems and supervises the opening. Your senior manager runs procurement and quality control on the ground. Those activities can require work authorization, and the available classifications can depend on the employee's role, salary, qualifications, the local employer, and the country involved.

We have had many instances where companies have called us at the last minute asking if we can “speed up an employee's visa” so they can open on time, and we usually can’t.

Sending someone abroad as a visitor to help with the opening is where this goes wrong because training staff, directing employees, and managing operations may not be permitted on visitor status. Handle immigration when you assign people to the project and determine what must be in place locally before sponsorship can begin. Family status matters too, since a spouse does not automatically receive work authorization in every country that admits them. A tourist or visitor visa is not a workaround for work authorization. The broader principle is one we emphasize repeatedly in our international work: whatever you think of the local rule, you still have to follow it. See Doing Business Internationally: 10 Things to Get Right.

8. Tax, Banking, and Getting the Money Out

Under standard treaty principles reflected in the OECD Model Tax Convention—the widely used framework that informs the negotiation and interpretation of many bilateral tax treaties—owning a foreign subsidiary does not by itself make that subsidiary a permanent establishment of the parent, but the parent's own activities can create permanent establishment exposure depending on premises, personnel, agents, and the applicable treaty and domestic rules.

You can create local tax exposure before headquarters believes it has a real operating presence. Our guide to doing business in Spain gives the everyday version, in which one salesperson working from Madrid raises tax, employment, and agency questions the company never intended to raise.

Related-party pricing needs attention from the start because a foreign restaurant operation typically pays the parent for brand royalties, management services, technology, financing, or other support. Those payments can raise withholding and transfer-pricing issues on top of ordinary corporate tax, and the arm's-length principle generally requires related entities to price transactions as independent parties would. Affiliated companies do not have free rein to place income where the tax result is best.

Indirect taxes belong in the model as well. VAT, GST, sales taxes, and other transaction taxes can materially affect restaurant pricing and margins, and some jurisdictions apply different treatment depending on what is sold and how it is consumed.

On the banking side, delay is often the risk. Beneficial-ownership verification, source-of-funds review, local officer requirements, and compliance review can stretch account opening for a foreign-owned entity well past what U.S. management assumes, with payroll registration and vendor payments waiting behind it. Some jurisdictions and banks still require in-person identity verification or other account-opening steps that can be difficult to complete from headquarters.

Payment systems carry a trap specific to restaurants. A U.S. technology stack built around card processing may not be commercially adequate or legally compliant in a market where customers pay primarily by mobile wallet or QR code or where tax rules require particular fiscal-register or electronic-invoicing systems. Some European and Latin American jurisdictions require restaurant sales to be recorded or reported through approved systems, and a U.S. point-of-sale system may not meet those requirements.

Decide before you capitalize the entity how your profits will come home. Dividend withholding, foreign-exchange controls, corporate-law reserve requirements, and banking procedures can all affect the cost and timing of repatriation. You may use dividends, royalties, management fees, loan repayments, or some combination, and each should be structured and documented before meaningful money moves between related companies.

9. Treat Customer and Employee Data as Part of Your Expansion

Reservations, loyalty programs, and delivery platforms make a modern restaurant a substantial collector of personal information, and security cameras and HR systems put employee data alongside it. Expansion drops all of that into privacy regimes that differ sharply from U.S. practice. The GDPR is the best known, and the United Kingdom, Brazil, Mexico, and many other jurisdictions maintain frameworks of their own.

Start with a data map: what you collect, where it lives, which vendors touch it, which borders it crosses, and when it is deleted. That exercise routinely exposes a gap between the privacy notice and the actual systems because the reservation platform is passing customer records to a marketing vendor or the loyalty database sits in a country nobody mentioned. Delivery platforms deserve specific attention, since the contract can determine whether you receive the customer data at all, and that question can outlive the commercial relationship.

Your data response plan should identify who takes the first report, who decides whether notification is required, and who preserves the evidence. Cross-border transfers require their own analysis and a lawful transfer mechanism. Our Data Privacy practice covers the cross-border pieces.

10. Protect Your Brand Before You Announce the Expansion

Trademark rights are territorial, and many important markets are first-to-file. Your U.S. registration does not give you rights in the country you enter next, and delay can let someone else acquire them first.

Registration alone is not the whole job. The Colombian fast-food company Frisby had operated for decades and held trademark rights including an EU design mark, and a Spanish company nevertheless registered the FRISBY word mark with the European Union Intellectual Property Office in 2024. Unlike the USPTO, the EUIPO does not refuse an application on relative grounds such as likelihood of confusion on its own initiative, so an earlier rights holder generally must oppose or later seek cancellation. Frisby apparently did not oppose in time, and decades of restaurant history did not solve the resulting problem. We wrote about this case in Fowl Play: The Frisby Fried Chicken Trademark Dispute. Burger King's Australian history makes the same point: global recognition is why Australians get their Whoppers at Hungry Jack's.

Local-language marks need their own decision, and the risk runs in two directions at once. We had a client learn, on its way into a Cantonese-speaking market, that the natural transliteration of its name sounded like a funeral term and that a phonetic equivalent had already been registered in the relevant class. One problem was marketing and the other was legal, and together they forced a rebrand that involved both lawyers and branding experts.

In markets using a different writing system, consumers may name your brand for you if you do not name it yourself, and the nickname they choose may already be registered by the time you notice. Starbucks handled this deliberately in China, adopting 星巴克 and building protection well beyond its core classes. Most restaurant groups do not need a portfolio that size. Every restaurant group does need phonetic and semantic screening in the local language and script, and registration of whatever it settles on.

Our articles on China Trademarks, Brand Names, Copycats, and Soundalikes and China Trademarks: More, More, More go through the strategy, and Global IP Protection: Why You Need a Strategy, Not Just an Application explains why your filing program should track your actual expansion plan.

Your restaurant's intellectual property extends past its name. Recipes, sourcing information, and training systems can qualify for trade-secret protection where the information is genuinely confidential, and you take reasonable steps to protect it. Confidentiality agreements are part of those steps only if they work under the law where they will be enforced.

The physical look of the restaurant can matter too, which is why hospitality companies sometimes pursue trade-dress protection alongside conventional trademarks, a subject we address in Copycat Concerns: What Hospitality Brands Need to Know About Trade Dress. If you are buying a restaurant business or entering a joint venture, confirm who actually owns the marks, domains, and social accounts being contributed. The company using the name is not always the company that owns it.

11. Localize the Contracts, and Choose Dispute Resolution With Collection in Mind

Expansion generates a stack of agreements, and the lease, the franchise or joint-venture documents, and the supply contracts carry much of the risk. Your U.S. forms remain valuable because they record which issues you have learned to care about and how you prefer to allocate risk. Treat them as source material, but be alert to how mandatory local law can override provisions that are valid at home. Start from the commercial objective and use your lawyer to draft the contract that can actually achieve it.

Choose the forum with enforcement in mind. A U.S. judgment does not automatically become executable against assets abroad, though many countries recognize foreign money judgments under their own laws, including principles of comity or reciprocity. Before choosing your home courts simply because they are familiar, ask where the other side's assets will be if you win.

A dispute with your landlord over a percentage-rent calculation is not the same as a dispute with a master franchisee over brand standards, and the clause should reflect the transaction, including the institution or rules, the seat, the governing law, and the language. For more on these complicated cross-border dispute issues, check out Dispute Resolution Provisions in International Contracts and International Arbitration in Cross-Border Contracts: What Companies Get Wrong.

12. Confirm the Insurance Covers the Foreign Operation

Before opening, confirm with your insurance broker the territorial scope, the named insured entities, and the treatment of liquor liability, employment practices, cyber exposure, and other material risks in the new country. Check as well whether local law requires locally issued coverage.

Apply the same scrutiny to counterparties. If a landlord, contractor, supplier, or franchisee has promised to carry insurance, confirm that the coverage exists and matches the contract where it matters. Learning after a claim that everyone assumed someone else's policy would respond is an expensive way to read an agreement. We once had a case where a company set up unsafe seating for a large American fast food company in Asia. The fast food company wanted to sue, but its contract with its seating contractor was such a mess that it ultimately chose not to sue.

13. Plan Your Exit Before You Need It

Many countries require you give employees notice, severance, or formal consultation before any termination. Lease obligations can survive your restaurant's closure. Tax filings, licenses, creditors, inventory, customer data, bank accounts, and the dissolution itself all have to be worked through, while a franchise or joint venture adds questions about trademarks, confidential information, digital assets, and customer relationships.

Those issues should shape the documents you sign at the beginning, when you still have leverage. The lease should address a material permitting failure. The franchise agreement should say what happens to the brand and customer data on termination. A joint venture needs a workable deadlock mechanism and an exit that does not depend entirely on the other side's goodwill.

Political risk fits the same frame, and Russia was only the extreme version of an ordinary proposition: the more you own on the ground, the more there is to unwind. You have the most bargaining power over exit terms before either side wants to exit.

Do the Legal Work While You Still Have Choices

International expansion carries risks no lawyer can remove. Your concept may not cross borders. Your location may disappoint. Food costs rise, franchisees underperform, and political conditions change.

The risks in this article are different because each was controllable at some earlier point on the calendar: signing the lease before checking the permitted use, building the pro forma around operating hours the local labor rules make uneconomic, ordering the kitchen before checking whether it can be installed, formulating the signature sauce around an ingredient the market prohibits, or announcing the brand before protecting it. Each becomes materially more expensive at the moment it becomes visible.

Bring counsel in before you sign the principal lease, commit to a partner, hire the local workforce, or publish the opening date. Your commercial opportunity should drive the expansion. The legal work should start early enough to let you achieve it.

Restaurant and hospitality companies can learn more about our Hospitality Industry Law practice and our International Business Formation Services. Harris Sliwoski has lawyers in Australia, Mexico, Portugal, Spain, and the United States, and we work with local counsel elsewhere when a question requires someone on the ground.