Focus: Asia Franchise Markets April 2016 | Page 22

Franchise Law.

Japan Market

Introduction
The Japanese franchising law is relatively relaxed compared to
other countries as there is no specific franchise law, the
regulations are encompassed within overall trade and company
laws which makes franchising a relatively straight forward
There is no uniform definition of
franchising in Japan but the
following 2 Acts are the most
relevant laws regarding definition.
1. If a franchise business falls
under the term "chaining
business", it falls under the
Medium and Small Retail
Commerce Promotion Act. A chain
business is defined as business
that, pursuant to an agreement
with uniform terms and
conditions, continuously sells or
acts as an agent for sales of
products and provides guidance
regarding management. In
addition, a ‘specified chain

business’ is defined as-'any chain
business whose agreement
includes clauses which permits its
members to use certain
trademarks, trade names or any
other signs, and collects joining
fees, or deposits any other money
from the member when
becoming a member’.
This law also covers information
required to be disclosed by the
franchisor and therefore some of
the basics underpinning a
franchise agreement such as initial
fees, restrictions on business,
types of products sold,
trademarks, duration/termination
of the agreement and royalty fees.