Management Measures For Commercial Franchising

Order No. fifteenth of People's Republic of China Ministry of Commerce 2007

The measures for the registration and management of commercial franchises have been discussed and approved by the sixth ministerial meeting of the Ministry of Commerce of People's Republic of China on 6 April 2007. It is hereby promulgated and implemented from May 1, 2007.

Management measures for commercial franchising

Article 1 in order to strengthen the management of commercial franchise activities and standardize the market order of franchising, the present Measures are formulated in accordance with the relevant provisions of the regulations on commercial franchise management (hereinafter referred to as the "Regulations").

The second article applies these measures to engage in commercial franchise activities within the territory of the People's Republic of China (hereinafter referred to as China).

Third the competent departments of commerce under the State Council and the competent departments of Commerce of the people's governments of provinces, autonomous regions and municipalities directly under the central government are the archival organs for commercial franchise.

Those engaging in commercial franchise activities within the province, autonomous region or municipality directly under the central government shall file a record with the competent department of Commerce of the people's Government of the province, autonomous region or municipality directly under the central government where the franchisor is located, and engage in franchise activities within the scope of the provinces, autonomous regions and municipalities directly under the central government, and shall file a record with the Department of commerce under the State Council.

The franchise of commercial franchises is implemented nationwide.

Franchisees who comply with the provisions of the regulations on commercial franchise management shall file their records through the government website (www.mofcom.gov.cn).

Article fourth any unit or individual shall have the right to report to the archival filing organ for any violation of the provisions of these measures.

Fifth franchisees applying for registration shall submit the following materials to the filing organ:

(1) the basic situation of commercial franchising.

(two) the distribution of all franchisees in China.

(three) the franchisor's market plan.

(four) a photocopy of the business license of an enterprise legal person or a copy of other principal qualification certificates.

(five) photocopy of the certificate of registration of trademarks, patents and other business resources related to franchise activities.

(six) a certificate issued by the municipal commercial department of a district that is in conformity with the provisions of the seventh paragraph and second paragraph of the regulations; the franchisee shall provide the business certificate (including Chinese plation) of the direct store, and be certified by the local notary office and the Chinese embassy or consulate.

Franchisees who have already engaged in franchise activities before May 1, 2007 are not applicable to the provisions of the preceding paragraph, but the franchisee shall first submit the first franchise contract concluded between the franchisee and the franchisee in China.

(seven) sample of franchise contract.

(eight) the directory of the franchise operation manual (to specify the number of pages in each chapter and the total number of pages of the manual, and to provide the estimated number of printed pages for such manuals on the internal network of the concession system).

(nine) the state laws and regulations require that the licensed products and services be approved before being submitted, and the approval documents from the competent authorities concerned must be submitted.

(ten) the franchisor's undertaking signed and sealed by the legal representative.

The materials mentioned above (1) to (three) are directly reported on the Internet, and (four) to (ten) should be submitted online to the electronic version of the portable document format (PDF).

The sixth franchisor shall apply to the archival filing office for filing within 15 days from the date when the franchisee has first entered into a franchise contract with the Chinese territory.

Franchisees who have engaged in franchise activities before May 1, 2007 shall apply to the competent commercial authorities for archival filing in accordance with the provisions of these measures within 1 years from the date of implementation of the regulations.

If the information of the seventh franchisees has changed, they shall apply for change to the filing authority within 30 days from the date of change.

The eighth franchisee shall report to the filing authority the situation of the establishment, cancellation, renewal and modification of the franchise contract in the previous year by March 31st.

The ninth franchisor shall carefully fill in all the information on the record and ensure that the contents are true, accurate and complete.

The tenth filing organs shall file their records within 10 days from the date of receipt of the documents and materials submitted by the franchisor in accordance with the fifth provision of these measures, and shall make a public announcement on the website of the Ministry of Commerce.

If the documents and materials submitted by the franchisee are incomplete, the archival filing organ may require that the documents and materials be supplemented within 7 days.

The filing authority shall file a record within 10 days from the date of the completion of the franchisor's material supplement.

Eleventh of the franchisees who have completed the record have one of the following acts, the archival filing organ may cancel the record and make a public announcement on the website of the Ministry of Commerce:

(1) the franchisor has been revoked by the competent registration authority because of the illegal operation of the franchisee.

(two) the record office receives the judicial proposal on the cancellation of the record made by the judicial organ because of the illegal operation of the franchisor.

(three) the franchisor conceals the information or provides false information to be verified.

(four) the franchisor voluntarily cancels.

The twelfth commercial departments of the people's governments of all provinces, autonomous regions and municipalities directly under the central government shall give feedback to the Ministry of Commerce within 10 days.

The thirteenth archival organs shall record and preserve the information materials of the franchisee in full and accurate manner while completing the filing procedures, and keep trade secrets for the franchisees according to law.

The fourteenth public can inquire the following information through the Ministry of commerce website:

(1) the franchisee's enterprise name and the registered trademark, the enterprise logo, the patent, the proprietary technology and other operational resources used by the franchise business.

(two) the franchisor's filing time.

(three) the franchisee's statutory place of operation, the way of contact and the name of the legal representative.

(four) the business address of the franchisee in China.

If the fifteenth franchisees fail to file the record in accordance with the provisions of the regulations and the present measures, the competent commercial department under the State Council and the competent commercial department of the people's Government of the province, autonomous region or municipality directly under the central government shall be ordered to file a record within a period of time, with a fine of not less than 10 thousand yuan or 50 thousand yuan, and a fine of not less than 50 thousand yuan or more than 100 thousand yuan after the overdue period.

Sixteenth franchisees who violate the provisions of the eighth provision of these Measures shall be ordered by the archival filing organ to make corrections and may be fined not more than 10 thousand yuan. If the circumstances are serious, they shall be fined under 10 thousand yuan or less than 50 thousand yuan, and they shall be publicised.

Seventeenth foreign franchisees engaged in franchise activities within the territory of China shall be carried out in accordance with the present measures.

The Hongkong, Macao Special Administrative Region and Taiwan District authorized ginseng shall be implemented according to these measures.

The eighteenth national industry associations should assist the competent government departments in doing a good job in filing enterprises, giving full play to the coordinating role of trade associations and strengthening industry self-discipline.

The nineteenth way is explained by the Ministry of Commerce of People's Republic of China.

The twentieth measures have been implemented since May 1, 2007.