Legal Issues In Franchising

1. The franchisor of the trademark licensing company, as the real owner of the registered trademark, shall file the trademark licensing contract with the Trademark Office of China for the record, and obtain the relevant archival certificate issued by the Trademark Office of China, such as the notice for the preparation of the trademark license contract.

According to the sixth article of the "commercial franchise management measures (Trial)" promulgated and implemented by the Ministry of internal trade in 1997, one of the conditions that the franchisee must have is that it must have a registered trademark.

The current and future trademark licensing should not be exclusive, that is, the franchisee can also allow multiple Licensor to use its trademark, not just one of the permitted parties.

Trademarks in the trademark license agreement must be approved by the Trademark Office of China. Otherwise, these trademarks will not be protected in China because of the regionalism of trademark protection.

Two, the pfer of technology in franchising is regulated by the regulations on technology pfer in 1985, the regulations on the management of technology import contracts in People's Republic of China and the rules for the implementation of the People's Republic of China technology import contract management regulations in 1988.

The franchisee shall submit the contract for technology pfer to China's foreign trade and economic cooperation institutions and obtain the certificate of technology import contract which is uniformly printed and numbered by MOFTEC.

The examination and approval agency for technology pfer is the Ministry of foreign trade and economic cooperation or the local council of foreign trade and economic cooperation.

The relationship between franchisee and franchisee is three. There are two ways of franchising: direct licensing and sub licensing.

A concession is that the franchisee grants the exclusive franchise to a party in a given area. The franchisee can always grant the franchisee a portion of the franchisee, or set up its own network in that area.

If a company in Singapore wants to carry out the consultancy and training service in the special industry in the mainland of China, it will charter a company to grant a franchise in China, that is, granting its exclusive franchise in China. It is always permitted by the Licensor to be awarded the training and consultation of the specific industry.

However, because the franchisee and the franchisee have no direct contractual relationship, they limit the ability of the franchisee to separate the franchisee from its business operation and quality control.

However, the execution of the quality and standard of the licensed product or service is closely related to the interests of the franchisee and the authorized party. Therefore, in the general license agreement and the sub license agreement, the franchisee should give the franchisee the right to supervise the execution of the sub license agreement.