FOCUS: China franchise market

China Market
Franchise Law.
Introduction
In order to better protect the legal rights and interests of
franchisees and consumers, the Chinese government imposed
registration and disclosure requirements on franchisors
operating in the country.
Key Regulations on Franchising in
China:
Currently, the key regulations on
franchising in China include: the
Regulation on Administration of
Commercial Franchises
(Regulation), the Administrative
Measures for the Registration of
Commercial Franchises
(Registration Measures), and the
Administrative Measures for
Information Disclosure of
Commercial Franchise (Disclosure
Measures). The Regulation was
promulgated by the State Council,
while both of the Measures were
issued by the Ministry of
Commerce (MOC).
Reproduced courtesy of
wileyrein.com
Robert A. Smith, Fairy Li
and Kimberly L. Sikora
Panza
Franchise Registration:
According to the Regulation, a
franchisor must, within 15 days
after signing a franchise
agreement for the first franchised
location in China, file an
application with the appropriate
commercial authority in the MOC
to register its franchise. The
registration requirement is an
administrative measure to
regulate franchise activities, and
also provides potential
franchisees with public access to
more information regarding the
franchisor and its business.
Although the failure to register
does not impact the effectiveness
of the franchise agreement, a
franchisor that fails to timely file
the franchise registration could
face a fine.