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