Situation at present:

1. Value chain:

• Chocolaterie de Puyricard France ("CPF" hereafter) buys a substantial quantity of bulk chocolate from its supplier in the north of Peru.
• CPF produces a selection of chocolates in Japan via a production license agreement. The beneficiary of the production license is Mr. Osu of Yokosuka in the south of Japan.
• All of Mr. Osu's production is delivered to Tanaka Luxury Candy stores ("TLC" hereafter).
• TLC is the beneficiary of an exclusive limited trademark license granted by CPF. TLC does not operate outside of Japan.

1. Intentions of CPF:

• Take over Osu's chocolate production facility
• Convert Osu's chocolate production facility into Chocolaterie de Puyricard Asia ("CPA" hereafter).
• International: Develop sales in Hong Kong (PRC), Taipei (Taiwan), and Seoul (South Korea).
• Japan: Develop its own retail stores in Tokyo, and then in Kobe and then onto the bigger Japanese cities.
• Trademark: pass the property of the Japanese trademark registration onto CPA and have CPA re-arrange the agreement with TLC, as TLC would no longer be the only company using the trademark in Japan.

1. Constraints:

• Japanese law does not authorize foreign companies to become a majority shareholder of a Japanese company. The sum of Japanese interests must be of at least 50% + 1 share.
• Consequently, CPF cannot simply "buy out" Osu with 100% control and then call it CPA. CPF must first include Osu and perhaps TLC in the scheme.
  • The best solution would be to have Osu and TLC share 51% of shares, CPF retaining 49%.

4 Questions:

1. The supplier of the bulk chocolate for CPA is Peru, however, it is invoiced by CPF for quality and cost control reasons. The supplier of TLC is CPA out of Yokosuka, 200 km. south of Tokyo. CPF workers are involved in Yokosuka, and in Tokyo as they set up "doll house" Chocolaterie de Puyricard boutiques. Another group of CPF employees are hard at work performing QC in the 100 TLC shops.
   1. Question: What is the legal regime of the CPF workers carrying out a mission that is less than 2 years long in Japan? State, and explain. (5 points)
2. Considering that CPA is the only producer of Chocolaterie de Puyricard in Asia, and the only one directly involved in supplying TLC in Japan, for the time being, as the Chocolaterie de Puyricard "Doll House" shops aren't up and running...
   1. Draft the contract worksheet for the future CPA distributor in Hong Kong. Call it "Hong Kong Luxury Delicacies, PLC". Do not forget all the different steps you went through to determine the best selection of chocolates for Japan... and Hong Kong is neither the PRC, nor Japan. Perhaps it would be best to begin with a market test? (7 points).
3. What should be done prior to any commercial activity in the future Asian markets? (5 points)
4. Once CPA has established its "Doll House" shops in Tokyo, it will want to replicate the complete selection of delicacies available in France.
   1. Propose a contract worksheet for the purchase of a selection of delicacies and of chocolate candies made in France, to complement those produced in Japan, in order to propose the full line of Chocolaterie de Puyricard delicacies in the "Doll House" Tokyo shops. The supplier would be CPF and the buyer would be CPA. (3 points).