Franchising is not just a simple purchase but a sale. This trade involves a lot of different fields, requiring the participants not only to learn about the issue of brand trading alone but also to research issues on the market, intellectual property, about Technology transfer.

So, is there any caveat to franchising? Hopefully the article below will answer that question for you.

I. What is a franchise?

Article 284 of the 2005 Commercial Law stipulates that franchising (or franchising) is a commercial activity for the purpose of making a profit. In which the franchisee allows and can request the franchisee to perform the service provision, purchase and sale of goods by himself with the following specific conditions:

- The purchase and sale of goods and provision of services are conducted in the manner of organizing a business as prescribed by the franchisor and attached to the trademark, trade name, business know-how, business slogan, franchise logo, advertising franchisor

- The franchisor has control and assistance to the franchisee in running the business.

The franchisor and franchisee must comply with the law on franchise. Both proceeded to sign a franchise contract in accordance with civil law. May be changed by forms of equivalent value as prescribed by law.

The contract must clearly state the rights, obligations and responsibilities of each party to the franchise. At the same time, the franchise franchise must be registered with the competent state agencies prescribed.

II. Rights and obligations of franchisees

According to the amended provisions of Article 5 of Decree No. 15 / VBHN-BCT dated April 25, 2014 detailing the Commercial Law regarding franchising: “Traders are allowed to grant commercial rights when the business system intends to do so. used for franchising that has been in operation for at least 01 year ”.

Articles 286 and 287 of the 2005 Commercial Law specify the rights and obligations of franchisees:

Rights of franchisees

Unless otherwise agreed, the franchisor has the following rights:

1. Receiving franchise money;

2. Organizing advertising for the franchise system and franchise network;

3. Periodically or irregularly checking the activities of the franchisee in order to ensure the consistency of the franchise system and the stability of the quality of goods and services.

Obligations of franchise traders

Unless otherwise agreed, franchise traders have the following obligations:

1. Provide documentation of the franchise system to the franchisee;

2. Initial training and regular technical assistance for franchisee to operate the operation in accordance with the franchise system;

3. Designing and arranging the places of sale and service provision at the expense of the franchisee;

4. Assurance of intellectual property rights over the subjects inscribed in the franchise contract;

5. Equal treatment of franchisees in the franchise system.

III. Rights and obligations of the Lessee

Unless otherwise agreed by franchising, the franchise according to law clearly states:

Rights and obligations of the lessee:

1. Possession and use of leased goods under a leasing contract and in accordance with law. In the absence of a specific agreement on how to use the leased goods, the leased goods must be used in a manner appropriate to the nature of such goods;

2. To preserve and preserve the leased goods during the lease term and return those goods to the lessor upon the expiry of the term;

3. To request lessors to perform goods maintenance and repair; If the lessor fails to perform this obligation within a reasonable time, the lessee may carry out maintenance and repair of the leased goods and the lessor shall bear the reasonable costs of the maintenance and repair. there;

4. To pay rent as agreed or as prescribed by law;

5. Not to sell or sublease leased goods.

Both the lessee and the lessor need to fully comply with their rights and obligations. In addition, the law also provides other provisions related to the franchise process. If you have any questions regarding franchising, please contact:

Dai Viet Notary Office (now Tran Hang Notary Office) / Dai Viet Limited Law Company for specific answers.

DAI VIET LAW CO., LTD-

TRAN HUNG NOTARY OFFICE

Address: No. 28 Lieu Giai Street - Ba Dinh - Hanoi

Tel: (04) 37478888 Fax: (04) 37473966

Hot-line: 0933.668.166

Email: info@luatdaiviet.vn

Website: www.luatdaiviet.vn