Franchising

FRANCHISING

Franchising  is a commercial activity whereby the franchisor allows and requires the franchisee to personally purchase and sell goods and provide services under certain conditions. A franchise contract is a contract that instructs an enterprise to use a product or an operating process that is an object of industrial property and is being protected. Franchising involves transferring technology, trademarks or other intellectual property objects.

Conditions for franchisors:  Traders are allowed to grant commercial rights when they fully meet the following conditions:

  • The business system intended to be used for franchising has been in operation  for at least  1 year.

(Even in the case of secondary franchising, the business system intended to be used for franchising must be operated for  at least  1 year  before re-issuing commercial rights to other traders).

  • Registered commercial franchising activities with competent authorities;
  • Goods and business services subject to commercial rights do not violate the provisions of law.

Conditions for franchisees:  Traders are allowed to receive commercial rights when they have registered a business line suitable to the subject of the commercial rights.

  • Goods and services permitted for commercial franchising are goods and services that are not on the List of goods and services banned from business.
  • In case the goods or services are on the List of goods and services with restricted business or the List of goods and services with conditional business, the enterprise can only do business after being granted a License by the industry management agency. business, documents of equivalent value or meeting business conditions.

Content of the franchise contract

In case the parties choose to apply Vietnamese law, the franchise contract may have the following main contents:

  • Content of commercial rights.
  • Rights and obligations of the Franchisor.
  • Rights and obligations of the franchisee.
  • Prices, recurring franchise fees and payment methods.
  • Validity period of the contract.
  • Renewing, terminating contracts and resolving disputes.

 

Information and documents customers need to provide

  1. Notarized copy of Business Registration Certificate or Investment Certificate in case of commercial franchising from Vietnam to foreign countries; Copy of Business Registration Certificate or equivalent document of foreign trader certified by the competent authority where the foreign trader is established in case of commercial franchise from abroad to Vietnam ;
  2. Notarized copy of industrial property rights protection certificate in Vietnam or abroad in case of transfer of rights to use industrial property objects that have been granted protection certificates;
  3. Documents proving the original franchisor’s approval to sub-franchise in case the trader registers franchising activities as a secondary franchisor;
  4. Audited financial statements for the most recent 1 year.

 

Franchise services include :

  • Conduct research, consult and select the franchise system that best suits customer needs;
  • Evaluate the potential and exploitation prospects of the selected franchise system, evaluate the capacity of the franchisor;
  • Legal advice throughout the franchise contract negotiation process;
  • Draft and check contract terms to protect customers’ rights in accordance with Vietnamese and international laws;
  • Consulting on financial issues in franchise contracts;
  • Carry out procedures for recording franchise contracts and applying for permission to conduct franchise transactions;
  • Monitor, advise and protect customers’ interests throughout the entire franchise process.

Contact Vipatco Company for advice and the best service at the most competitive prices Email vietstar@vipatco.vn