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Indian Country: Franchising's Latest Frontier

By Gabriel S. Galanda
January 28, 2005

Is your franchise looking to penetrate new or emerging domestic markets? If so, your company should consider franchising in Indian Country. The $18-billion Indian gaming industry is rapidly transforming the face of tribal lands and drawing millions of people to the reservation for business, employment, or recreation. It is that enormous influx of people onto tribal land ' a “captive audience” of reservation consumers ' and a relaxed regulatory environment that make Indian Country ripe for franchising.

“Indian law” ' a hodgepodge of tribal, state, and federal law ' is the foundation for every transaction in Indian Country. Whether you represent a franchisor that is considering expanding onto the reservation for the first time or you are an experienced international franchise lawyer, you must, at a minimum, understand the following fundamental Indian legal notions before consummating a tribal franchise.

The Third Sovereign. Under established legal precedent, Indian tribes are “distinct, independent political communities, retaining their original natural rights” in matters of local self-government. Worcester v. Georgia, 31 U.S. 515 (1832). While no longer “possessed of the full attributes of sovereignty,” tribes remain a “separate people, with the power of regulating their internal and social relations.” U.S. v. Kagama, 118 U.S. 375 (1886). Essentially, Indians possess “the right … to make their own laws and be ruled by them.” Williams v. Lee, 358 U.S. 217, 220 (1959).

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