Administrative Measures For The Information Disclosure Of Commercial Franchises

Original Language Title: 商业特许经营信息披露管理办法

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Read the untranslated law here: http://www.chinalaw.gov.cn/article/fgkd/xfg/gwybmgz/201207/20120700369598.shtml

Administrative measures for the information disclosure of commercial franchises

    (February 23, 2012 the Ministry of Commerce announced on April 1, 2012, 2012 2nd promulgation) first in order to safeguard legitimate rights and interests of both the franchisor and the franchisee, in accordance with the regulations on the administration of commercial franchises (hereinafter referred to as the regulations), these measures are formulated.

    Article in the People's Republic of China territory of commercial franchise procedures apply.

    Article related parties mentioned in these measures refers to the franchisor's parent company or natural person shareholders, licensors owns, directly or indirectly wholly or majority-owned subsidiary, and the franchisor, directly or indirectly, wholly or majority-owned by the same owners of the company.

    Fourth a Franchiser shall, in accordance with the provisions of the Ordinance, in franchise contracts for commercial, at least before the date of 30th, disclosed to the franchisee in written form the information provided for in article fifth, but the franchisor franchisee in the original concession contract renewal unless the same conditions.

Article fifth franchisor information disclosure should include the following:

(A) the basic situation of the franchisor and franchise activities. 1.

Franchisor's name, mailing address, contact information, legal representative, General Manager, registered capital, business scope and number of existing stores, address and contact phone number. 2.

Franchisor profile engaging in commercial franchising activities. 3.

The basic situation of the franchisor for the record. 4.

Direction franchisee by the franchisor's associate provides products and services shall disclose the basic situation of the related parties. 5.

The franchisor or its affiliates in the past 2 years of bankruptcy or filed for bankruptcy.

(B) licensees operate on resources fundamentals. 1.

Registered trade mark, logo, patent, know-how, management models and other business resources of the text description. 2.

Business resource owner is the franchisor of the related party shall disclose the related party's basic information, the authorized content, and state associated with the licensing of suspension or early termination situations, how to deal with the franchise system. 3.

The franchisor (or its affiliates) of the registered trade mark, logo, patent, know-how and other franchise related business involved litigation or arbitration of resources.

(C) the basic situation of franchising fees. 1.

Licensees and third parties charge type, amount, criteria and manner of payment, and cannot be disclosed, shall specify the reasons, fees are not uniform, should disclose the maximum and minimum standards, and explain the reasons. 2.

Return of security deposit receipt, return conditions, time and return. 3.

Were licensees pay fees before the franchising contract concluded, that part of the fee and the conditions of use, manner.

(D) provide the franchisee with products, services, prices, conditions of the equipment and so on. 1.

Whether the franchisee must be from the franchisor (or its affiliates) purchased products, services, or equipment and related prices, conditions, etc. 2.

Whether the franchisee must be specified from the franchisor (or approved) purchase dealer, product, service, or equipment. 3.

Franchisees can choose other suppliers as well as the conditions of the supplier.

(E) provide services to the franchisee. 1.

Business training content, delivery, and implementation plans, including training locations, and the term. 2.

Technical support for specific content, delivery, and implementation plans, including resource name, categories and types of products, facilities and equipment, and so on.

(F) the business activities of the franchisee is guidance, oversight and content. 1.

Operating instructions of specific content, delivery, and implementation plans, including the location, the decoration decoration, shop management, advertising sales, product configuration, and so on. 2.

Supervision of and content obligations franchisee and do not fulfil their obligations of responsibility. 3.

Franchisor and franchisee responsibilities for consumer complaints and compensation.

(G) the franchise network investment budget. 1.

Investment budget may include the cost of initial fee; training; real estate and renovation, equipment, Office supplies, furniture and other acquisition costs; the initial inventory; water, electricity and gas fees to obtain the cost of licenses and other government approvals; start working capital. 2.

These data sources and estimation of the costs basis.

(H) the franchisee of the situation within China. 1.

Distribution of current and projected the number of franchisees, geographical, mandate, with or without exclusive rights (such as, should indicate the expected specific ranges). 2.

The operation of the existing franchisee, including franchisee of actual investment, the average sales volume, cost, gross profit, net profit and other information, and should explain the source of the above information.

(IX) the last 2 years by an accounting firm or auditing firm of the franchisor's financial accounting and audit report summary report summary.

(10) the franchisor in the last 5 years of franchise-related litigation and arbitration cases, including cases, litigation (arbitration), jurisdiction and the result of the request.

(11) the franchisor and its legal representative major illegal business records. 1.

Was fined 300,000 Yuan on penalty of relevant administrative law enforcement departments. 2.

Be held criminally responsible.

(12) the franchise contract. 1.

Sample franchise contract. 2.

    If the franchiser requires the franchisee and the franchisor (or its affiliates) signed other contracts relating to the franchise should also provide samples of such contracts.

    Sixth franchisee in promotion, publicity, no deceptive, misleading conduct, published advertisements shall not contain propaganda of a single franchisee proceeds from engaging in commercial franchising activities.

Article seventh the franchisor to the franchisee before disclosing information has the right to require the franchisee to sign confidentiality agreements.

Franchisee business secrets obtained in the course of the contract, regardless of whether the franchise contract was established, and shall not be disclosed or improper use.

After the termination of the concession contract, is aware of the relationship between the franchisor franchisee contracts trade secrets, confidentiality agreement even after a contract is terminated, shall be liable for the duty of confidentiality.

    Franchisee in violation of the provisions of the preceding two paragraphs, leaks or improper use of trade secrets to franchisers or cause losses to other people shall bear the liability for consequential damages.

    Article eighth franchises after the disclosure of information to the franchisee, franchisee information should be informed that the content issue a receipt to the franchisor (a duplicate), signed by the franchisee, one retained by the franchisee and the other retained by the franchisor.

    Nineth licensed concealed from affecting the franchise contract making it impossible to achieve the purpose of the contract information or the disclosure of false information, the franchisee may rescind the franchise agreement.

    Article tenth franchisor violation of the relevant provisions of this approach, a franchisee has the right to report to the Commerce authorities, by the investigation, in accordance with the Ordinance, 26th, 27th, 28th, will be punished.

    11th article of the approach by the People's Republic of China's Ministry of Commerce is responsible for the interpretation. 12th these measures come into force on April 1, 2012. Original of the administrative measures for the information disclosure of commercial franchises (Ministry of Commerce 2007 of 16th) repealed simultaneously.