1. What is commercial franchising?
Commercial franchising is a commercial activity whereby the franchisor allows and requires the franchisee to independently conduct the buying and selling of goods or providing services under certain conditions. A commercial franchise contract is a contract that guides a business in using a product or an operating process that is an object of industrial property and is protected. Commercial franchising involves the transfer of technology, trademarks, or other intellectual property objects.
2. Conditions for conducting commercial franchising activities
2.1. Conditions for the Franchisor
A trader is allowed to grant a commercial franchise when the business system intended for franchising has been in operation for at least 01 year.
Note:
According to the latest provisions of Decree 08/2018/ND-CP, regulations on conditions for the Franchisee and regulations on goods and services allowed for franchise business have been abolished.
Contents of a commercial franchise contract
- Contents of the commercial franchise.
- Rights and obligations of the Franchisor.
- Rights and obligations of the Franchisee.
- Price, periodic franchise fees, and payment methods.
- Term of validity of the contract.
- Extension, termination of the contract, and dispute resolution.
Note:
The commercial franchise contract must be made in Vietnamese. In cases of franchising from Vietnam to abroad, the language of the commercial franchise contract shall be agreed upon by the parties.
2.2. Documents clients need to provide to VN Law Firm
- Notarized copy of the Business Registration Certificate or Investment Registration Certificate in case of franchising from Vietnam abroad; notarized copy of the Business Registration Certificate or equivalent documents of foreign traders confirmed by competent authorities where the foreign trader is established in case of franchising from abroad into Vietnam;
- Notarized copy of the industrial property protection title in Vietnam or abroad in case of transfer of the right to use industrial property objects that have been granted protection titles;
- Documents proving the approval for sub-franchising from the original franchisor in case the trader registering franchise activities is a sub-franchisor;
- Audited financial statements for the most recent 01 year.
2.3. VN Law Firm’s services in commercial franchising consulting
- Conducting research, consulting, and selecting the most suitable franchise system for client needs;
- Assessing the potential and prospects for exploitation of the selected franchise system, evaluating the capacity of the franchisor;
- Legal consulting throughout the negotiation process of the franchise contract;
- Drafting and reviewing contract clauses to protect client rights in accordance with Vietnamese and international law;
- Consulting on financial matters in the franchise contract;
- Conducting procedures for recording franchise contracts, applying for permission to carry out franchise transactions;
- Monitoring, consulting, and protecting client rights throughout the entire franchise process.
- Clients interested in commercial franchising should contact LawFirm.Vn for prompt and effective consultation!
