Not too long ago, the usual scenario for a start-up rep firm and/or for that matter established ones, whether it is one-person or a firm with multiple sales personnel, was to gravitate towards an industry familiar to them as a result of having worked in or with that industry in some fashion. And, most often, the initial principals were almost always domestic companies.

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Today, however, most reps have been exposed to an opportunity to represent a foreign principal and many have undertaken this representation. The differences between repping a domestic principal and a foreign principal can be dramatic and often result in situations that had not been contemplated. Therefore, it is important to evaluate the pros and cons of any potential foreign principal with a critical eye.

As part of the evaluation process, at a minimum, a check list should be created to determine the following issues:

• What chance does the foreign principal really have of developing business in the markets you cover (i.e., can they qualify as a supplier)?

• Do they have the resources and, if so, are they committed to investing in developing the market?

• Do you have the resources and are you really willing to invest in developing the market for that foreign principal?

• What type of compensation — retainer fee, plus generous commissions with longer-term relationship (e.g., multi-year no-cut contract with good post-termination commissions)? If it does not look good initially, then it probably will not get better.

• Who pays for foreign travel and other expenses?

• Because they are a foreign entity, what exposure do you have for product liability and do they have product liability and other insurance that can cover you?

• How is a contract dispute resolved? What law, forum and venue (e.g., courts, arbitration, etc.) will be used? If the foreign principal insists on dispute resolution under foreign law and/or in an inconvenient venue, you should probably take a pass unless there is some really good reason not to. As a compromise, however, the use of international arbitration in one of the international arbitration institutions can be an appropriate method. Not all of these institutions are suitable for a variety of reasons and they all are quite expensive, although often worth the money. Because of these differences, it is critical to get the advice of a lawyer who has experience in international matters before you sign anything. Do not get involved with a foreign principal just because you think they will be fair.

• What type of assets does the foreign principal have in U.S. jurisdictions that are available for satisfying a judgment? Examples are accounts receivable, plant, machinery, etc.

The foregoing are some, but not all, of the items that should be carefully investigated; and much of what you consider needs to be defined with a view to the specific industry involved and your specific concerns.

Having said all that, there are excellent opportunities available to some, but not all, reps. Happy hunting!