Table of contents:
- 1. What is a franchise?
- 2. Franchising activities of Vietnamese traders in Vietnam
- 3. Commercial franchise activities of foreign traders in Vietnam
- 4. What are the tasks of a lawyer advising on commercial franchise activities?
- A. Advising on business conditions related to commercial franchise methods.
- 5. Why do you need to use Legal Services for Commercial Franchise Consultation?
- 6. Criteria for Selecting a Commercial Rights Consultation Lawyer:
- 7. Where to Find a Lawyer for Commercial Franchise Consultation?
- 8. Frequently Asked Questions About Lawyer for Commercial Franchise Consultation
A franchise is a commercial activity whereby the franchisor allows and requires the franchisee to personally purchase and sell goods and provide services under the following conditions: The purchase and sale of goods and provision of services are conducted according to the business organization method prescribed by the franchisor and are associated with trademarks, trade names, business secrets, and business slogans, as well as the business and advertising logo of the franchisor; The franchisor has the right to control and assist the franchisee in running the business.
1. What is a franchise?
According to Article 284 of the 2005 Commercial Law: “A franchise is a commercial activity whereby the franchisor allows and requires the franchisee to personally purchase and sell goods and provide services under the following conditions:
1. The purchase and sale of goods and provision of services are conducted according to the business organization method prescribed by the franchisor and are associated with trademarks, trade names, business secrets, and business slogans, as well as the business and advertising logo of the franchisor.
2. The franchisor has the right to control and assist the franchisee in running the business.”
2. Franchising activities of Vietnamese traders in Vietnam
a. Conditions for implementing commercial franchising:
Traders are allowed to grant commercial rights when the business system intended for franchising has been in operation for at least 1 year, as per Article 8 of Decree 08/2018/ND-CP.
Traders do not have to register commercial franchising activities but must comply with the reporting regime to the Department of Industry and Trade, as stipulated in Article 3 of Decree 120/2011/ND-CP.
b. Procedures for implementing franchise reports:
Implement the reporting regime according to the form in Part B, Appendix III of Circular 09/2006/TT-BTM.
Traders must periodically notify the contents in this Part to the competent registration agency no later than January 15 every year.
3. Commercial franchise activities of foreign traders in Vietnam
a. Conditions for implementing commercial franchise:
- Traders are allowed to grant franchise rights when the business system intended for franchising has been operational for at least 01 year.
According to Article 8 of Decree 08/2018/ND-CP:
- Traders must register commercial franchise activities with the Ministry of Industry and Trade. According to the provisions of Clause 1, Article 17, Section 3 of Decree 35/2006/ND-CP, Section 1 of Circular 09/2006/TT-BTM, and Point a1, Section a, Article 2 of Circular 03/2024/TT-BCT.
b. Procedures for registering commercial franchise activities:
- Franchise Registration Dossier Request
Based on Clause 2 of Article 3 of Decree 120/2011/ND-CP; Article 19 of Decree 35/2006/ND-CP; Clause 2, Clause 4 of Section 2 of Circular 09/2006/TT-BTM, Item a1 of Point a of Clause 1 of Article 2 of Circular 03/2024/TT-BCT, the dossier for franchise activity registration at the Ministry of Industry and Trade includes:
Application for registration of commercial franchise activities according to the MD-1 form in Appendix II issued with Circular 09/2006/TT-BTM.
Introduction of commercial franchise rights according to the template in Appendix III issued with Circular 09/2006/TT-BTM.
A certified copy of the business registration certificate or equivalent document of the foreign trader issued by the competent authority in the foreign country in case of commercial franchise from abroad to Vietnam.
Certified Copy of Industrial Property Rights Certificate: This applies to cases where the transfer of rights to industrial property objects has been granted either in Vietnam or abroad.
Document Confirming Approval for Reassignment: In situations where the original rights holder permits reassignment, especially when the registering entity for licensing the transfer of rights is a secondary rights holder.
- Processing the Registration of Trademark Assignment Activities:
Upon receiving applications for, the registration authority must issue an acknowledgment receipt. The receipt should be prepared in triplicate using forms TB-1A, TB-1B (as specified in Appendix II accompanying this regulation). One copy is given to the registering entity for commercial franchise activities, and two copies are retained by the registration authority.
For incomplete or valid applications, the registration authority must notify the applicant in writing within a maximum of 2 working days from the date of receiving the application. The notification should follow the format of forms TB-2A, TB-2B (as specified in Appendix II accompanying this regulation), requesting the applicant to provide additional and complete documentation. The processing time for the application is calculated from the moment the applicant for commercial franchise activities submits the complete documentation.
The registering entity for commercial franchise activities has the right to request clarification from the registration authority regarding any necessary supplementary requirements. The registration authority is responsible for responding to such requests from the applicant.
- Registering Commercial Franchise Activities in the Book of Commercial Franchise Activity Registration:
Within a maximum of 5 working days from the date of receiving a complete and valid application, the registration authority is responsible for registering the commercial franchise activities of the business in the Book of Commercial Franchise Activity Registration. This registration is done using forms S1 and S2, and the business is notified in writing according to the format specified in forms TB-3A and TB-3B (as detailed in Appendix II accompanying this regulation).
In cases where the registration of commercial franchise activities is denied, within a maximum of 5 working days from the date of receiving a complete and valid application, the registration authority must provide written notification explicitly stating the reasons for refusal. This notification should follow the format of forms TB-4A and TB-4B (as specified in Appendix II accompanying this regulation).
The registration authority assigns registration numbers in the Book of Commercial Franchise Activity Registration as follows:
+ Assignment Type Code: NQV for franchise from abroad to Vietnam.
+ Province Code: 2 characters as instructed in Appendix I accompanying this regulation.
+ Business Entity Serial Number: 6 characters, ranging from 000001 to 999999.
+ These codes are separated by hyphens.
- Fee Collection for Commercial Franchise Activity Registration:
Upon receiving applications for commercial franchise activities, the registration authority collects fees for commercial franchise activity registration following the guidelines set by the Ministry of Finance.
- Re-registration of Commercial Franchise Activities:
In cases where a business registered for trademark assignment activities domestically under Section 2 of Item I of this regulation changes its main office address to another province, the business is responsible for re-registering commercial franchise activities at the registration authority in the new location.
The re-registration process follows the instructions in Sections 3, 4, 5, 6, and 7 of this Item. The application must also include the approval notice from the registration authority where the business was previously registered.
Within a maximum of 5 working days from the date of completing the registration procedures for commercial franchise activities in the new area, the business is responsible for notifying the previous registration authority in writing to issue a transfer notice according to the format specified in form TB-6C (as detailed in Appendix II accompanying this regulation).
4. What are the tasks of a lawyer advising on commercial franchise activities?
A. Advising on business conditions related to commercial franchise methods.
B. Advising on establishing businesses that receive commercial franchise .
C. Drafting franchise contracts, reviewing draft contracts, and recommending modifications to protect rights.
D. Assisting in negotiation and modification of franchise contracts.
E. Drafting documentation and carrying out procedures for commercial franchise registration.
F. Providing legal support for franchisee businesses to ensure compliance.
G. Offering legal supervision for the implementation of commercial franchise activities.
5. Why do you need to use Legal Services for Commercial Franchise Consultation?
While commercial franchise activities can bring significant benefits, they also come with associated risks. Let’s identify these risks from both the assignor’s and assignee’s perspectives:
For the Assignor (Rights Holder):
Risk of Intellectual Property Theft: Many businesses worry about the risk of their trade secrets, business models, or proprietary knowledge being stolen or copied. After participating in a franchise system for some time, the assignee might branch out and operate independently using a similar business model. This scenario can lead to disputes within the franchise system.
Maintaining Reputation: The assignor’s reputation is at stake. If any party within the franchise system violates terms or makes mistakes, it affects the overall credibility and trustworthiness of the entire system.
For the Assignee (Franchisee):
Interconnected Risks: Franchisees often have relationships and agreements with both the franchisor (assignor) and other franchisees. Any violation or error by one party can impact the entire franchise system’s reputation.
Ensuring Compliance: Franchisees need to adhere to the terms and conditions set by the franchisor. Legal guidance ensures that franchisees understand their obligations and rights within the system.
These are typical risks in the franchise model, and there are other potential risks as well. To establish a sustainable and mutually beneficial franchise system, businesses should seek experienced legal counsel. A knowledgeable lawyer can create a well-structured framework, outline clear terms, and safeguard the interests of both parties involved.
6. Criteria for Selecting a Commercial Rights Consultation Lawyer:
When choosing a lawyer for commercial franchise consultation, it’s essential to consider the following criteria:
a. Ethical and Dedicated Approach:
The lawyer should approach their work with ethics and dedication, keeping the client’s legitimate interests at the forefront.
b. Deep Expertise and Knowledge:
A lawyer must possess in-depth expertise in contract law and related fields.
Their legal competence should extend beyond just commercial franchise matters.
c. Sharp Analytical Skills:
The ability to think critically and solve issues of clients swiftly and effectively is crucial.
d. Extensive Experience:
Accumulated experience through education, training, negotiation, and actual commercial franchise cases is essential.
e. Team Collaboration:
A well-coordinated team can provide optimal solutions for clients.
Having a team allows for better support and cooperation.
f. Understanding of Commercial Law:
A lawyer should have a solid grasp of commercial rights and legal aspects related to commercial franchise .
7. Where to Find a Lawyer for Commercial Franchise Consultation?
If you’re seeking a lawyer for commercial franchise consultation, consider Phong & Partners Law Firm. We take pride in providing high-quality legal services, earning the trust of many individuals and businesses.
At Phong & Partners, we prioritize service quality and client satisfaction. Our guiding principles are “Respect for Justice” and “Integrity.” We approach our profession with passion, responsibility, and a focus on putting our clients’ interests first. Our legal services are of the highest quality.
If you need to connect with Phong & Partners Law Firm, please use the following contact information:
PHONG & PARTNERS LAW FIRM
Phong & Partners Lawyer in Da Nang city
1. Phong & Partners Lawyer in Thanh Khe - Hai Chau district:
Add: 06th Floor, Thanh Loi Building, 249 Nguyen Van Linh, Da Nang
Tel: 0905.102425 - 02363 822678
Email: phongpartnerslaw@gmail.com
2. Phong & Partners Lawyer in Son Tra district:
01 Dong Giang, Danang - 0905.205624
3. Phong & Partners Lawyer in Lien Chieu district:
21 Truong Van Da, Danang -0961.283093
4. Phong & Partners Lawyer in Ngu Hanh Son district:
03 Chu Cam Phong, Danang - 0905.579269
5. Phong & Partners Lawyer in Cam Le district:
346 Cach Mang Thang Tam, Danang -0901.955099
Phong & Partners Lawyer in Ho Chi Minh City
Add: Floor 9, K&M Building, 33 Ung Van Khiem, 25 Ward, Binh Thanh district, Ho Chi Minh City.
Tel: 0905.503.678 - 02822 12 5678
Email: phongpartnerslaw.hcmc@gmail.com
8. Frequently Asked Questions About Lawyer for Commercial Franchise Consultation
a. Advantages of Commercial Franchise ? Both the licensor and the licensee benefit from commercial franchise, often described as a “win-win” situation. For the licensor, engaging in commercial franchise helps develop the brand, expand the system, reduce investment capital, and even generate good revenue and profits from the franchise activity. As for the licensee, participating in the franchise system allows them to leverage the brand advantage of the licensor. They can utilize product trademarks, trade names, business secrets, slogans, business symbols, and advertising from the licensor. This helps the licensee save time and costs in building their own brand. Additionally, the licensee receives support from the licensor.
b. Cases where Commercial Franchise Registration is not necessary: The following cases do not require commercial franchise registration but necessitate reporting to the Department of Industry and Trade:
- The first case involves domestic commercial franchise .
- The second case pertains to international commercial franchise from Vietnam to foreign countries.
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PHONG & PARTNERS LAW FIRM
Phong & Partners Lawyer in Da Nang city
1. Phong & Partners Lawyer in Thanh Khe - Hai Chau district:
Add: 06th Floor, Thanh Loi Building, 249 Nguyen Van Linh, Da Nang
Tel: 0905.102425 - 02363 822678
Email: phongpartnerslaw@gmail.com
2. Phong & Partners Lawyer in Son Tra district:
01 Dong Giang, Danang - 0905.205624
3. Phong & Partners Lawyer in Lien Chieu district:
21 Truong Van Da, Danang -0961.283093
4. Phong & Partners Lawyer in Ngu Hanh Son district:
03 Chu Cam Phong, Danang - 0905.579269
5. Phong & Partners Lawyer in Cam Le district:
346 Cach Mang Thang Tam, Danang -0901.955099
Phong & Partners Lawyer in Ho Chi Minh City
Add: Floor 9, K&M Building, 33 Ung Van Khiem, 25 Ward, Binh Thanh district, Ho Chi Minh City.
Tel: 0905.503.678 - 02822 12 5678
Email: phongpartnerslaw.hcmc@gmail.com
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