dismissed L-1A Case: Restaurant

U.S. Department of Homeland Security 
20 Mass. Ave., N.W., Rm. A3000 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
identifying data deleted to • 
PUBLIC COPY prev*t clewlY unw-tea indm of personal privacy 
File: SRC 04 014 5 1957 Office: TEXAS SERVICE CENTER Date: OCT 0 4 2006 
Petition: 
 Petition for a Nonirnmigrant Worker Pursuant to Section 10 1 (a)(15)(L) of the Immigration 
and Nationality Act, 8 U.S.C. 5 1 101 (a)(15)(L) 
IN BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
i~dministrative Appeals Office 
SRC 04 014 51957 
, Page 2 
DISCUSSION: The director, Texas Service Center, denied the petition for a nonimmigrant visa. The matter 
is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal. 
The petitioner filed this nonimmigrant petition seeking to employ the beneficiary as an L-1A nonimmigrant 
intracompany transferee in the position of manager pursuant to section 101(a)(15)(L) of the Immigration and 
Nationality Act (the Act), 8 U.S.C. 5 1101(a)(15)(L). The petitioner is a corporation organized under the laws 
of the State of Texas and claims to be engaged in operating a restaurant. The petitioner also claims that it is 
the subsidiary of ocated il-rhe beneficiary was initially admitted to the 
United States in B-2 visitor status, and the petitioner now seeks to change the beneficiary's status to L-1A 
nonirnrnigrant classification. 
Upon initial review of the matter, the director sent the petitioner a request for additional evidence on October 
29, 2003. Specifically, the director requested a copy of the company's franchise agreement for it-1 
restaurant in Fort Worth, Texas. 
In response, the petitioner submitted a copy of the requesteranchise agreement. 
The director denied the petition concluding that the petitioner did not establish that it had a qualifying 
relationship with the foreign entity. 
The petitioner subsequently filed an appeal. The director declined to treat the appeal as a motion and 
forwarded the appeal to the AAO for review. On appeal, counsel for the petitioner asserts that the U.S. entity 
meets the requirements of a qualifying organization as a subsidiary of the foreign entity. In the alternative, 
counsel submits an amended Petition for a Nonimmigrant Worker and argues that the beneficiary also 
qualifies for E-2 classification. In support of this assertion, the petitioner submits additional evidence. 
Upon review and for the reasons discussed herein, counsel's assertions are not persuasive and, thus, the AAO 
will dismiss the appeal. 
To establish eligibility for the L-1 nonimrnigrant visa classification, the petitioner must meet the criteria 
outlined in section 101(a)(15)(L) of the Act. Specifically, a qualifying organization must have employed the 
beneficiary in a qualifying managerial or executive capacity, or in a specialized knowledge capacity, for one 
continuous year within three years preceding the beneficiary's application for admission into the United 
States. In addition, the beneficiary must seek to enter the United States temporarily to continue rendering his 
or her services to the same employer or a subsidiary or affiliate thereof in a managerial, executive, or 
specialized knowledge capacity. 
The regulation at 8 C.F.R. 5 214.2(1)(3) states in part that an individual petition filed on Form 1-129 shall be 
accompanied by: 
(i) 
 Evidence that the petitioner and the organization which employed or will employ the 
alien are qualifying organizations as defined in paragraph (l)(l)(ii)(G) of this section. 
SRC 04 014 51957 
Page 3 
(ii) 
 Evidence that the alien will be employed in an executive, managerial, or specialized 
knowledge capacity, including a detailed description of the services to be performed. 
(iii) 
 Evidence that the alien has at least one continuous year of full time employment 
abroad with a qualifying organization within the three years preceding the filing of 
the petition. 
(iv) 
 Evidence that the alien's prior year of employment abroad was in a position that was 
managerial, executive or involved specialized knowledge and that the alien's prior 
education, training, and employment qualifies himher to perform the intended 
services in the United States; however, the work in the United States need not be the 
same work which the alien performed abroad. 
In addition, the regulation at 8 C.F.R. 8 214.2(1)(3)(~) provides that, if the manager or executive being 
transferred to the United States is to be employed in a new office, the following additional evidence should 
also be submitted: 
(A) 
 Sufficient physical premises to house the new office have been secured; 
(B) 
 The beneficiary has been employed for one continuous year in the three year period 
preceding the filing of the petition in an executive or managerial capacity and that the 
proposed employment involved executive or managerial authority over the new 
operation; and 
(C) 
 The intended United States operation, within one year of the approval of the petition, 
will support an executive or managerial position as defined in paragraphs (I)(l)(ii)(B) 
or (C) of this section, supported by information regarding: 
(1) 
 The proposed nature of the office describing the scope of the entity; its 
organizational structure, and its financial goals; 
(2) 
 The size of the United States investment and the financial ability of the 
foreign entity to remunerate the beneficiary and to commence doing business 
in the United States; and 
(3) 
 The organizational structure of the foreign entity. 
The primary issue in the present matter is whether the United States and foreign entities are qualifying 
organizations as defined in 8 C.F.R. 5 214.2(1)(l)(ii)(G). 
Title 8 C.F.R. 8 214.2(I)(l)(ii)(G) defines the term "qualifying organization" as a "United States or foreign 
firm, corporation, or other legal entity" which: 
SRC 04 014 51957 
Page 4 
(1) 
 Meets exactly one of the qualifying relationships specified in the definitions of a 
parent, branch, affiliate or subsidiary specified in paragraph (I)(l)(ii) of this section; 
(2) 
 Is or will be doing business (engaging in international trade is not required) as an 
employer in the United States and in at least one other country directly or through a 
parent, branch, affiliate, or subsidiary for the duration of the alien's stay in the United 
States as an intracompany transferee; and 
(3) 
 Otherwise meets the requirements of section 10 1 (a)(15)(L) of the Act. 
In addition, 8 C.F.R. 3 214.2(I)(l)(ii)(K) defines the term "subsidiary" as: 
[A] fm, corporation, or other legal entity of which a parent owns, directly or indirectly, 
more than half of the entity and controls the entity; or owns, directly or indirectly, half of the 
entity and controls the entity; or owns, directly or indirectly, 50 percent of a 50-50 joint 
venture and has equal control and veto power over the entity; or owns, directly or indirectly, 
less than half of the entity, but in fact controls the entity. 
The petitioner in this case maintains in the initial petition that the U.S. entity is a wholly owned subsidiary of 
the foreign entity. In support of this assertion, the petitioner submitted its articles of incorporation, a 
shareholder certificate issued to the foreign entity, and a second blank shareholder certificate. A franchise 
agreement was also submitted in response to the director's request as evidence of the relationship between 
nd the restaurant to be purchased by the U.S. entity. 
In her review of the control of the franchisedrestaurant, the director noted that the franchise 
agreement included the following understanding: 
Franchisee understands and acknowledges that Company, as franchisor, has not and does not 
exercise any control over the day-to-day operations of Franchisee's Restaurant, including, 
without limitation, the selection, scheduling and supervision of Franchisee's employees or 
contractors, the manner of operating, scheduling and supervision of food preparation, and all 
aspects of delivery operations. 
The director then concluded that, "[as] the petitioning company is operating as a franchise, the petition cannot 
be approved." 
While the director correctly determined that the evidence did not establish that a qualifying relationship 
existed between the U.S. and foreign entities, it does not appear that the basis for this conclusion was correct. 
First, as there is no evidence in the record to indicate that the restaurant and th-ranchise agreement 
had been sold and transferred to the petitioner at or before the time the petition was filed on October 15, 2003, 
the director's statement that the petitioner "is operating as a franchise" is incorrect and unsupported by the 
evidence. Specifically, the Offer to Purchase document only indicates that the seller and the buyer had agreed 
to a closing date of October 3 1, 2003 for the seller's business. Thus, even if evidence of the sale and transfer 
SRC 04 014 51957 
Page 5 
of both the restaurant and the franchise agreement had been submitted,' the transaction(s) would not have 
occurred until after the petition was filed. Consequently, the petitioner's claims as well as the director's 
statement that the petitioner was operating a franchise at the time the petition was filed are both incorrect, and 
the director's statement must be withdrawn. 
Second, even if the petitioner had been operating under a franchise agreement, the director's blanket statement 
that a company operating as a franchise cannot be a qualifying organization is incorrect and will, therefore, be 
withdrawn for this reason as well. The qualifying relationship that is at issue is that of the etitioner and the 
foreign entity and not that of the foreign entity a-r that of the U.S. entity an h Simply 
operating as a franchise does not prohibit a petitioner from having a qualifying relationship with a foreign 
entity. If a petitioner were trying, for example, to transfer a manager from a franchisedrestaurant 
abroad to manage a franchise- restaurant in the United States, without any relationship between the 
two restaurants other than being part of the same franchise, the director should conclude that no qualifying 
relationslup exists based upon the franchise agreements each business may have wit- However, if 
a U.S. entity seeks to transfer a manager to the United States to manage a restaurant business it has purchased, 
the fact that the restaurant is part of a franchise will not bar the U.S. entity from having a qualifyrng 
relationship with the foreign entity. 
At the same time, while the director should primarily focus on the relationship between a petitioner and a 
foreign entity in determining whether they are qualifying organizations, this does not mean it is incorrect for 
the director to examine an applicable franchise agreement. As discussed above, simply owning a franchise, in 
itself, does not mean a petitioner cannot meet the requirements for a qualifying organization. In such cases, 
however, the ownership and control of the franchise is an issue that would normally need to be examined in 
order to ensure that the petitioner has actual control over the business instead of the franchisor, especially 
where, as here, the petitioner's sole business appears to be the franchised restaurant it has agreed to purchase. 
In this matter, assuming again that the petitioner did operate a restaurant under the submitted franchise 
agreement, the section of the agreement quoted by the director indicates that the franchisee would maintain 
control over the restaurant, not the franchisor. By quoting this specific section of the franchise agreement, it 
appears the director may have inadvertently confused franchisee with franchisor and, thus, incorrectly 
determined that the franchisee did not have control over the business. 
 Moreover, contrary to such a 
conclusion. section 7.B.4 of the franchise ameement indicates that the franchisee must install and ~rominentlv 
" 
sign that reads "'Independently Owned and Operated by [Franchisee Name], a 
' While this section of the agreement was presumably included as additional protection o 
' According to section 11 of themranchise agreement, the franchisee, identified on page 1 as 
is not permitted to sell, assign, or otherwise transfer any rights under the agreement or any 
interest in the license and franchise "without first obtaining the express written consent" o 
there is no evidence in the record tham~obtained an express written consent to F se asslgn, or 
transfer any rights under the agreement to the petitioner, it cannot be concluded that the petitioner ever 
operated under this franchise agreement before or after the L-IA petition was filed on behalf of the 
beneficiary. 
SRC 04 014 51957 
Page 6 
from indemnification, it also corroborates the finding that the franchisee would maintain control over the 
operations of the franchised restaurant. 
However, given that the petitioner was not operating under a franchise agreement at the time the petition was 
filed, the franchise agreement is not relevant to the present matter and will not be further discussed. Thus, as 
indicated above, the crux of the issue is whether the petitioner had a qualifying relationship with the foreign 
entity. The regulation and case law confirm that ownership and control are the factors that must be examined 
in determining whether a qualifying relationship exists between United States and foreign entities for 
purposes of this visa classification. Matter of Church Scientology International, 19 I&N Dec. 593 (BIA 
1988); see also Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter of Hughes, 18 
I&N Dec. 289 (Comm. 1982). In the context of this visa petition, ownership refers to the direct or indirect 
legal right of possession of the assets of an entity with full power and authority to control; control means the 
direct or indirect legal right and authority to direct the establishment, management, and operations of an 
entity. Matter of Church Scientology International, 19 I&N Dec. at 595. 
As indicated above, the petitioner initially claimed under penalty of perjury on the supplement to Form 1-129, 
Petition for a Nonimmigrant Worker, that the U.S. entity is a wholly owned subsidiary of the foreign entity. 
In support of this assertion, the petitioner submitted its Articles of Incorporation, which indicated that it was 
authorized to issue 100,000 shares at a par value of $1 .OO each and that at least $1,000.00 worth of shares had 
to be issued before it could commence business. In addition, the petitioner submitted a stock certificate, 
which indicated that 1,000 shares were issued to the foreign entity on October 9, 2003. A second, blank stock 
certificate was also submitted, presumably as evidence that no other stocks had been issued beyond the initial 
1,000. 
On appeal, however, counsel and the petitioner both make contradictory claims regarding the ownership of 
the U.S. entity. Specifically, in her letter dated December 4, 2003, counsel states on page two that the 
petitioner is a subsidiary of the foreign entity. Then on page three of the same letter, in an apparent attempt to 
Drove in the alternative that the beneficiary also qualifies for E-2 Classification, counsel states that the 
petitioner is "one hundred percent (100%) owned by 
Moreover. on the su~olement to the amended Form 1-126, the petitioner claims undk penalty of pe jury that 
conclu 
Iwns 100% of the U.S. entity. Based on these conflicting statements, the AAO cannot 
~de that the petitioner has met its burden in establishing that it has a qualifying relationship with the 
foreign entity. 
Moreover. as the foreim entitv aupears to be a vartnershiu. by its very definition counsel and the petitioner 
w A, - 
could not have meant thatdirectly owned 100%*of the U.S. entity via his ownership of 
the foreign entity. Furthermore, upon review of the submitted Partnership Deed of the foreign entity, of the 
- 
five partners listidas not one of the five named. fu here fore, as- 
did not own in any part the foreign entity and as the foreign entity could not each own 
100% of the U.S. entity, the MO is left to conclude that counsel and the petitioner made willful 
misrepresentations as to a material fact, the ownership of the petitioner, in their attempt to obtain benefits 
SRC 04 014 51957 
Page 7 
under the Act for the alien beneficiary in violation of section 274C(a)(1),(2), and (5) of the Act, 8 U.S.C. 9 
1324c(a)(1),(2), and (5).2 
Accordingly, upon review of the petition and the conflicting evidence presented, the petitioner has not 
established that it meets the definition of a qualifying organization as the "same employer or a subsidiary or 
affiliate thereof' as required by section 101(a)(15)(L) of the Act, 8 U.S.C. 9 1101(a)(15)(L). Thus, the 
decision of the director will be affirmed, and the petition will be denied. 
Moreover, it is noted for the record that counsel's request to amend the petition on appeal is not properly 
before the AAO. The regulations at 8 C.F.R. 8 214.2(1)(7)(i)(C) state: 
The petitioner shall file an amended petition, with fee, at the service center where the original 
petition was filed to reflect changes in approved relationships, additional qualifying 
organizations under a blanket petition, change in capacity of employment (i.e. from a 
specialized knowledge position to a managerial position), or any information which would 
affect the beneficiary's eligibility under section 10 1 (a)(15)(L) of the Act. 
The request to reconsider the original petition on appeal as a petition for E-2 classification is, therefore, 
rejected. 
Beyond the decision of the director, the petitioner indicated under penalty of perjury that the U.S. and foreign 
entities have the same qualifying relationship as they did during the one-year period of the alien's employment 
abroad with the foreign partnership. As the U.S. entity was not incorporated until August 5, 2003, two 
months before the petition was filed, it appears the petitioner did not even exist prior to the beneficiary's entry 
to the United States in B-2 status on May 7,2003. Therefore, the petitioner either misrepresented another fact 
in this case or made a serious error by responding to this question on the supplement to Form 1-129 in the 
affirmative. 
Another error made on the supplement to Form 1-129 was the petitioner's claim that the beneficiary was not 
coming to the United States to open a new office. It is possible that the petitioner believed that by buying an 
existing business, the franchised ening a new office. However, as indicated 
above, the petitioner had not staurant business as of the time the petition 
was filed. According to the regulations, a new office is defined as "an organization which has been doing 
business in the United States through a parent, branch, affiliate, or subsidiary for less than a year." 8 C.F.R. 9 
214.2(1)(l)(ii)(F). Based on the record before the director, no evidence has been presented to indicate that the 
2 
 The Service reserves its right to provide formal notice to counsel and the petitioner of their respective 
violations of section 274C(a)(1),(2), and (5) of the Act, 8 U.S.C. 3 1324c(a)(1),(2), and (5), and to issue cease 
and desist orders with civil money penalties in accordance with section 274C(d)(3) of the Act, 8 U.S.C. 5 
1324c(d)(3). 
SRC 04 014 51957 
Page 8 
petitioner had been doing business in the United States for any amount of timehd, therefore, it should be 
considered to be a new office. 
As a new office, the petitioner is required under 8 C.F.R. § 214.2(1)(3)(v)(A) to prove that sufficient physical 
premises have been secured for the new office. As reviously discussed, the petitioner did not provide any 
evidence that it ever purchased the franchised estaurant business. In addition, although a sublease 
for a discount liquor store and check cashing service was submitted, it was signed and dated by the petitioner 
on June 1, 2003, two months prior to the date the U.S. entity was incorporated and four months prior to when 
the petitioner was authorized under its Articles of Incorporation to commence business. Therefore, the 
petitioner has failed to prove that it had secured sufficient physical premises for the new office by the time the 
petition was filed. For this additional reason, the petition may not be approved. 
Moreover, while the petitioner claims that the beneficiary has been employed abroad by the foreign entity in 
the position of creative manager since July 1, 2001, it has failed to provide any evidence of this employment, 
such as pay statements or other payroll documents. Thus, even though it appears the beneficiary may own 
15% of the foreign entity, this in itself does not mean the foreign partnership actually employed the 
beneficiary for one continuous year in the three year period preceding the filing of the petition as required by 
8 C.F.R. 3 214.2(1)(3)(v)(B). Moreover, based on the vague job duties provided, the AAO is unable to 
determine whether the beneficiary's claimed position abroad was primarily managerial or executive as defined 
and required by the Act and the corresponding regulations. Id.; See Section 101(a)(44)(A) and (B) of the Act, 
8 U.S.C. § 1101(a)(44)(A) and (B); See 8 C.F.R. 8 214.2(1)(l)(ii)(B) and (C). For these additional reasons, 
the appeal must be dismissed. 
Finally, one additional material misrepresentation should be noted for the record. 
 In her letter dated 
December 4, 2003, counsel confirms on page three that the petitioner was incorporated on August 5, 2003. 
Counsel then states on page four that the petitioner "has sales of approximately six hundred thousand dollars 
($600,000 USD) ending June 30, 2003." In addition, the petitioner under penalty of perjury claims on the 
Form 1-129 that it had a gross annual income of $600,461.00 ending June 2003. Although counsel and the 
petitioner appear to be relying on the fi-anchisedestaurant business for this stated income, as the 
petitioner had not purchased thstaurant business at the time these claims were made, they remain 
false and misleading. If CIS fails to believe that a fact stated in the petition is true, CIS may reject that fact. 
Section 204(b) of the Act, 8 U.S.C. 3 1154(b); see also Anetekhai v. I.N.S., 876 F.2d 1218, 1220 (5th 
Cir.1989); Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F. Supp. 7, 10 (D.D.C.1988); Systronics Corp. v. INS, 
153 F. Supp. 2d 7, 15 (D.D.C. 2001). 
"Although invoices, financial statements, and tax documents were submitted, this evidence pertained to the 
franchisedestaurant, which the petitioner only agreed to purchase. Again, no evidence was 
presented to show that the petitioner actually purchased the franchised restaurant business. 
Moreover, as previously indicated, based on the petitioner's Articles of Incorporation, it was not authorized to 
commence business until $1,000.00 worth of shares had been issued, which did not apparently occur until 
October 9,2003, less than a week before the petition was filed. 
SRC 04 014 51957 
Page 9 
An application or petition that fails to comply with the technical requirements of the law may be denied by 
the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See 
Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), affd. 345 F.3d 683 
(9th Cir. 2003); see also Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews 
appeals on a de novo basis). 
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 
 1361. Here, that burden has not been met. Accordingly, the 
director's decision will be affirmed and the petition will be denied. 
ORDER: The appeal is dismissed.