Commercial franchise

Commercial franchise is a commercial activity whereby franchisors permit and require franchisees to undertake by themselves to purchase or sell goods or provide services on certain conditions. A commercial franchise contract guides an enterprise about usage of a good or a working process which is a subject matter of industrial property rights and is protected. Commercial franchise involved in technology transfer, trademark of goods or others.

Commercial franchise conditions:

For franchisors:

A trader shall be permitted to grant commercial rights when fully satisfying the following conditions:

• The business system intended for franchise has been in operation for at least one year;

If a Vietnamese trader is the primary franchisee of a foreign franchisor, such Vietnamese trader must conduct business my mode of franchising for at least one year in Vietnam before sub-franchising.

• Registered franchising with authorized bodies;
• The in-business goods or services covered by commercial rights do not violate the law.

For franchisees:

A trader shell be permitted to receive commercial rights when such trader has registered business sectors subject to commercial rights.

Contents of commercial franchise contract:

In case parties choose the law of Vietnam to govern the contract, the main contents of a commercial franchise contract include:

• Contents of franchised commercial rights;
• Rights and obligations of franchisor;
• Rights and obligation of franchisee;
• Price, periodical franchise fee and payment method;
• Validity of the contract;
• Contract renewal and termination; dispute settlements.

Documents clients need to provide Viet An Law Firm:

1. Notarized copies of the Certificate of Business Registration or the Certificate of Investment Registration in case overseas franchises from Vietnam; copies of the Certificate of Business Registration or equivalent documents, which are confirmed by authorized bodies in foreign countries, of foreign traders in case franchises to Vietnam;
2. Notarized copies of Industry Protection Title in Vietnam or overseas in case licensing of protected industrial property rights;
3. Documents proving agreement of franchisor allow secondary franchise in case the trader is a primary franchisee;
4. Audited financial statements in the nearest year.

Viet An Law Firm Services in Commercial Franchise:

• Check, consult and define the most suitable franchise system with client’s demand;
• Consider and give conclusion about potential exploitation of the chosen franchise system and franchisor’s ability;
• Give legal advice during franchise contract negotiation;
• Draft and check contract terms to protect client’s rights complying with the law of Vietnam and international law;
• Consult about financial problems of commercial franchise contract;
• Conduct procedures of commercial franchise contract and ask for permission of franchise transactions;
• Observe, consult and protect client’s rights during franchise process.

Clients who are concerned with commercial franchise, please contact Viet An Law Firm to receive legal advice in an effective way!