A well-established business model successfully applied worldwide, “franchising” refers to businesses that license their operations (including products, branding, and expertise) upon the payment of a contractual fee.
Read on to find out whether investing in a US franchise meets the eligibility requirements of the E-2 visa.
Explaining Franchise Businesses – The Fundamentals
In a franchise business, the owner of a company (franchisor) grants another party (franchisee) the right to carry out specific commercial activities following its business model. Essentially, the franchisor “leases” elements like trademarks, operational systems, customer base, etc.
There are two basic methods of franchising – product/trademark franchising and business model franchising. Business model franchising is often the most complex of these variants, as franchisees can have access to a wide array of services, such as:
- Site selection
- Staff training
- Operational training
- Supply of goods required in daily operations
- Marketing plans
In either case, the franchisee only has access to all these benefits upon the payment of a franchisee fee.
E-2 Treaty Investor Visa – Eligibility Requirements
The basic eligibility requirements for E-2 status are:
- The applicant must be a national from a treaty country
- The applicant must have invested (or be actively in the process of investing) a substantial amount of capital in a US-based bona fide enterprise, and
- The applicant must be seeking to enter the US solely to develop and direct the proposed investment
The term “bona fide enterprise” refers to “a real, active, and operating commercial or entrepreneurial undertaking which produces services or goods for profit.” Also, E-2 enterprises must meet all applicable regulations to conduct business within the jurisdiction where the company is established.
USCIS requires E-2 applicants to show “at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.”
Can You Buy a Franchise on E2 Visa? – The Verdict
One of the benefits of the E-2 nonimmigrant classification is the flexibility in terms of eligible business options. Treaty investors have the option to start a new business from scratch, purchase an existing business, or even invest in a franchise.
Not only franchises are eligible to be E-2 investments under USCIS regulations, but these businesses are particularly suitable for foreign investors due to their nature. When adjudicating applications, visa officers often assess the likelihood of success of the applicant’s proposed enterprise.
Franchise companies have a higher success rate than average start-up companies, which is a favorable aspect for E-2 visa applicants. When selecting the ideal franchise to invest in, E-2 applicants must only rely on options with highly developed and proven business models.
Another key element of franchise companies in E-2 applications is the feasibility of this option for applicants who lack business education or experience. Franchises operate based on pattern systems that must be replicated by franchisees.
Franchisors must provide the initial training and support the business formation with operation manuals, training materials, and staff preparation. Depending on how the franchise agreement is drafted, the franchisor might have to provide ongoing support throughout the period provided in the contract.
Do You Want to Invest in an E-2 Franchise Business? – Immediately Contact Attorney Romy B. Jurado
Waste no time with uncertainty. Contact Immigration Attorney Romy B. Jurado today by calling (305) 921-0976 or emailing Romy@juradolawfirm.com to schedule a consultation.