Ministry of Commerce Decree No. 25 of 2004
Chapter I General Provisions
Article 1 For the purpose of regulating the behavior of commercial franchising, protecting the legitimate rights and interests of the parties involved, and promoting the healthy and orderly development of commercial franchising
, these Measures are formulated.
Article 2 The commercial franchising (hereinafter referred to as franchising), refers to the signing of the contract, the franchisor will have the
right to grant others the use of trademarks, trade names, business models and other business resources, to be granted to the use of the franchisee; the franchisee in accordance with the contract
agreed to engage in business activities under a unified business system, and pay the franchisor franchise fees.
Article 3
Article 3 These Measures shall apply to franchising activities within the territory of the People's Republic of China.
Article 4 The franchisor may, in accordance with the contract, grant the franchise directly to the franchisee, who invests in the establishment of franchise
licensed outlets to carry out business activities, but may not sub-grant the franchise again; or the exclusive franchise
rights in a certain area to the franchisee, who may then grant the franchise to other applicants
Article 5 to carry out franchising shall comply with the laws and regulations of the People's Republic of China *** and the State, follow the voluntary, fair, honest, trust
principle, shall not harm the legitimate rights and interests of consumers.
The franchisor shall not engage in illegal marketing activities under the name of franchising.
The franchisor shall not engage in commercial activities by way of franchising that would lead to monopolization of the market or impede fair competition.
Article 6 The Ministry of Commerce shall supervise and manage the national franchising activities, and the competent departments of commerce at all levels shall supervise and manage the franchising
activities under their jurisdiction.
Chapter II: Parties to the Franchise
Article 7: The franchisor shall have the following conditions:
(1) an enterprise or other economic organization established by law;
(2) possession of the right to license the use of trademarks, trade names, and business models and other business resources;
(3) the ability to provide long-term guidance and training services to the franchisee;
(4) the ability to provide the franchisee with the necessary training services;
(5) the ability to provide the franchisee with the necessary training services; and
(4) has at least two directly-managed stores in China that have been in operation for more than one year, or directly-managed stores established by its subsidiaries or holding companies;
(5) for franchises that require the franchisor to provide goods supply, the franchisor should have a stable and quality-assured goods supply
system, and be able to provide the relevant services.
(vi) The franchisor shall have a stable, quality-assured goods supply system and be able to provide relevant services.
(F) has a good reputation, no record of fraudulent activities in the form of franchising.
Article 8 The franchisee shall have the following conditions:
(a) an enterprise or other economic organization established by law;
(b) have the capital, fixed premises, personnel and other appropriate to the franchise.
Article 9 The franchisor enjoys the following rights:
(1) to ensure the unity of the franchising system and the consistency of the quality of the products and services, to supervise the franchisee's
business activities in accordance with the contract;
(2) to the franchisee who violates the provisions of the franchising contract, infringes on the legitimate rights and interests of the franchisor, and destroys the franchising system.
According to the contract to terminate its franchise qualification;
(C) according to the contract to collect the franchise fee and deposit;
(D) the contract agreed upon other rights.
Article 10 The franchisor shall fulfill the following obligations:
(1) to disclose information in a timely manner in accordance with the relevant provisions of these Measures;
(2) to grant the franchise to the franchisee to use and to provide business symbols and business manuals on behalf of the franchisee;
(3) to provide the franchisee with sales, business or technical guidance, training, and other services necessary to carry out franchising. (c) Provide the franchisee with sales, business or technical guidance, training and other services necessary for the franchisee to carry out the franchise business
;
(d) Provide the franchisee with the supply of goods in accordance with the contract. In addition to proprietary goods and in order to ensure the quality of the franchise must be
licensor or the licensor designated suppliers to provide goods, the franchisor shall not force the franchisee to accept the supply of goods, but
can specify the quality standards that the goods should meet, or propose a number of suppliers for the franchisee to choose;
(e) the franchisor of the quality of the designated suppliers should bear the responsibility to guarantee the quality of products.
(v) The franchisor shall be responsible for guaranteeing the quality of the products of its designated suppliers;
(vi) Promotional and advertising campaigns as agreed in the contract;
(vii) Other obligations as agreed in the contract.
Article 11 The franchisee shall enjoy the following rights:
(1) to obtain the trademark, trade name, business model and other business resources authorized for use by the franchisor; (2) to obtain training and guidance provided by the franchisor; (3) to obtain the supply of goods provided or arranged by the franchisor in a timely manner according to the contractual price; (4) to obtain the promotional support carried out by the franchisor; (5) to obtain the promotional support carried out by the franchisor; (6) to obtain the support of the franchisor; and (7) to obtain the other obligations as agreed in the contract. (v) other rights agreed in the contract.
Article 12 The franchisee shall fulfill the following obligations:
(a) to carry out business activities in accordance with the agreement of the contract; (b) to pay the franchise fee, deposit; (c) to maintain the unity of the franchise
operating system, and shall not transfer the franchise without the permission of the franchisor; (d) to the franchisor in a timely manner to provide the real business
status, financial situation and other information agreed in the contract; (e) to provide the franchisee with a comprehensive and timely information, and the franchisee shall not be liable for any loss or damage. (d) to provide the franchisor with timely and truthful information about the business situation, financial situation and other contractual information; (e) to accept the franchisor's guidance and supervision; (f) to keep the franchisor's business secrets
confidential; (g) other obligations agreed in the contract.
Chapter III Franchise Contract
Article 13 The contents of the franchise contract shall be agreed upon by the parties, and generally include the following:
(1) the name and residence of the parties;
(2) the content, duration, location and exclusivity or otherwise of the authorized licensed use of the franchise;
(3) the type of franchise fee, (c) the type of franchise fee, the amount, payment method, and the collection and return of the deposit;
(d) confidentiality clauses;
(e) quality control of the products or services franchised and responsibility;
(f) training and guidance;
(g) the use of trade names;
(h) the use of intellectual property rights, such as trademarks;
(i) consumer complaints;
(j) the use of the Internet; (k) the use of the Internet and the use of the Internet; (l) the use of the Internet and the use of the Internet. (ix) consumer complaints;
(x) publicity and advertising;
(xi) change and termination of the contract;
(xii) liability for breach of contract;
(xiii) terms of dispute resolution
(xiv) other terms agreed by both parties.
Article 14 Franchise fee refers to the fees paid by the franchisee for obtaining the franchise, including the following:
(a) Franchise fee: a one-time fee paid by the franchisee to the franchisor for obtaining the franchise;
(b) Royalty fee: a fee paid by the franchisee to the franchisor according to a certain standard or proportion in the process of using the franchise.
(iii) other agreed fees: refers to the franchisee under the contract, the franchisee to obtain the supply of goods or services provided by the franchisor
services and other fees paid to the franchisor.
Guarantee refers to a certain fee charged by the franchisor to the franchisee to ensure that the franchisee fulfills the franchise contract. The security deposit shall be returned to the franchisee after the expiration of the
contract.
The parties to the franchise shall agree on the franchise fee and security deposit on the basis of the principle of fairness and reasonableness.
Article 15 The term of the franchise contract shall generally be not less than three years.
After the expiration of the franchise contract, the franchisor and the franchisee may, in accordance with the principle of fairness and reasonableness, negotiate and determine the conditions for renewal of the franchise contract
.
Article 16 After the termination of the franchise contract, the original franchisee shall not, without the consent of the franchisor, continue to use the franchisor's registered trade
marks, trade names or other signs, shall not apply for the registration of the franchisor's registered trademark as a trademark of a similar class of goods or services,
shall not apply for the registration of the words which are identical with or similar to the franchisor's registered trademark as a trade name, and shall not apply for the registration of words which are identical with or similar to the franchisor's registered trademark as a trade name of a company.
No application shall be filed for registration of a trade name in the name of the enterprise with words identical or similar to the registered trademark of the franchisor, and no sign identical or similar to the franchisor's
registered trademark, trade name or store decoration shall be used for the same or similar goods or services.
Chapter IV Information Disclosure
Article 17 The franchisor and the franchisee shall disclose relevant
information in a timely manner before the signing of the franchise contract and in the course of the franchise operation.
Article 18 The franchisor shall, 20 days before the date of the formal signing of the franchise contract, provide the applicant in writing with true
and accurate information about the basic information of the franchise and the text of the franchise contract.
Article 19 The basic information materials disclosed by the franchisor shall include the following:
(1) The name, residence, registered capital, business scope, the number of years engaged in franchising and other major matters of the franchisor, in order to
and the content of the financial report audited by an accounting firm and basic information such as tax payment;
(2) The number of the franchisee, (b) the number of franchisees, distribution locations, operation and franchise network investment budget table, and the proportion of franchisees who terminate the franchise
operation contract to the total number of franchisees;
(c) trademark registration, licensing and litigation; trade names, business models and other business resources;
(d) the type and amount of the franchise fee, the method of charging, and the return method of the deposit;
(e) the type and amount of the franchise fee, the method of collection and the return method of the deposit
(5) All cases involving litigation in the last five years;
(6) Various kinds of goods or services that can be provided to the franchisee, as well as additional conditions and restrictions, etc.;
(7) Proof of the ability to provide training and guidance to the franchisee, and the actual situation of the provision of training or guidance;
(8) General information about the legal representative and other key persons in charge;
(8) The legal representative and other key persons in charge. (viii) Basic information of the legal representative and other key persons in charge and whether they have been criminally punished and whether they have been held personally liable for the bankruptcy of the enterprise;
(ix) Any other information that the franchisor may disclose at the request of the franchisee.
As a result of inadequate disclosure of information, the provision of false information caused by the franchisee to suffer economic losses, the franchisor shall bear compensation
responsibility.
Article 20 The franchisee shall, in accordance with the requirements of the franchisor, truthfully provide information about their ability to operate, including the main
proof of qualifications, proof of credit, proof of property rights. In the franchising process, should be in accordance with the requirements of the franchisor to provide timely and truthful
real business situation and other contractual information.
Article 21 During the franchise period and after the termination of the franchise contract, the franchisee and its employees without the consent of the franchisor,
shall not disclose, use or allow others to use the franchisee's trade secrets in their possession.
Article 22 People and applicants who have not identified the franchise contract with the franchisor, but know the franchisor's business secrets
through the franchisor's disclosure of information, shall bear the obligation of confidentiality. Without the consent of the franchisor, shall not divulge, disclose to others or transfer the commercial secrets of the franchisor
.
Chapter V Advertising
Article 23 When the franchisor publicizes, promotes or sells the franchise, the content of the advertising shall be accurate, truthful and
legal, and there shall not be any deception, omission of material facts or statements that may be misleading.
Article 24 The records, figures or other relevant information of the franchisor and the franchisee that directly or indirectly contain the franchisor's operating revenues
or earnings in the advertising and publicity materials shall be true, and the area and time involved shall be clear.
Article 25 The franchisor and the franchisee shall not imitate another person's
trademarks, advertising images and phrases, or other identification marks in any way that may mislead, deceive or cause confusion.
Article 26 In the franchise promotion activities, the franchisor shall not artificially exaggerate the benefits brought by the franchise or
intentionally conceal any situation that may objectively arise from the franchise and affect the interests of others.
Chapter VI Supervision and Management
Article 27 The competent department of commerce at all levels shall strengthen the management and coordination of franchising activities in the administrative region,
guiding the local industry associations (chambers of commerce) to carry out their work.
The competent department of commerce at all levels shall establish franchisors, franchisees credit file, timely publication of the list of non-compliant enterprises.
Article 28 The franchise industry associations (chambers of commerce) shall formulate industry specifications in accordance with these Measures, carry out industry self-
law, provide relevant services for the franchisee, and promote the development of the industry.
Article 29 The franchisor shall, in January of each year, report to the competent business department of its location and the competent business department of the location of the franchisee for the record of the franchise contract signed in the previous year.
The competent business department of the location and the competent business department of the location of the franchisee shall file the record. The competent business authority of the location shall report the filing
to the competent business authority of the higher level.
Article 30 in the franchising activities involving patent licensing, shall be in accordance with the "Chinese People's *** and the State Patent Law" and
its implementing regulations of the relevant provisions of the patent licensing contract, and in accordance with the "Patent Licensing Contract Record Management Measures" provisions
for the record.
Article 31 Before carrying out franchising activities, the franchisor shall handle the filing of the trademark license contract in accordance with the provisions of the Trademark Law of the People's Republic of China and its
implementation regulations.
Chapter VII Special Provisions for Foreign Invested Enterprises
Article 32 Foreign invested enterprises shall not engage in the prohibited
businesses in the Catalogue of Industrial Guidance for Foreign Investment by way of franchising.
Article 33 If a foreign invested enterprise engages in commercial activities by way of franchising, it shall submit an application to the original approval department to increase the business scope of "engaging in commercial activities by way of franchising", and submit the following materials:
(1) application letter and board of directors' resolution;
(2) enterprise's business scope of operation; and(2) Business license and certificate of approval of foreign-invested enterprise (copy);
(3) contract, charter amendment agreement (foreign-invested enterprises only submit the charter amendment);
(4) documents proving compliance with the provisions of Article 7 of the Measures;
(5) basic information reflecting the provisions of Article 19 of the Measures;
(6) sample franchise contract;
(6) the franchise agreement (F) Sample franchise contract;
(VII) Franchise operation manual.
The approval department shall make a written decision of approval or disapproval within 30 days from the date of receipt of all the above application materials.
After obtaining the approval, the applicant shall, within one month after obtaining the Certificate of Approval for Foreign Invested Enterprises issued by the approving department, apply for the change of enterprise registration with the
industrial and commercial administrative authorities.
Article 34 Where a foreign invested enterprise is authorized to engage in commercial activities by way of franchising, it shall report in January of each year
the status of the franchise contract signed in the previous year to the original approval department and the competent department of commerce in the place where the franchisee is located for the record.
Article 35 When a foreign investor establishes a foreign-invested enterprise that engages in commercial activities exclusively in the form of franchising,
in addition to complying with these Measures, it shall also comply with the provisions of the relevant laws, regulations and rules on foreign investment.
Article 36 A foreign-invested enterprise that has been engaged in commercial activities by way of franchising before the implementation of these Measures shall record the situation of the business that has been
conducted with the original approval department, and if it continues to engage in commercial activities by way of franchising, it shall go through the relevant procedures in accordance with the procedures stipulated in this Chapter
.
Article 37 Hong Kong, Macao and Taiwan investment enterprises in the Mainland to engage in commercial activities in the form of franchising with reference to the provisions of this Chapter.
Chapter VIII Legal Liability
Article 38 Violation of the provisions of Article 7 and Article 8 of these Measures, the competent department of commerce shall order rectification, and may impose a fine of up to 30,000
yuan; if the circumstances are serious, submit to the administrative organs for industry and commerce to revoke the business license.
Article 39 Failure to disclose information in accordance with the provisions of these Measures, the competent department of commerce shall order rectification and impose a fine of 30,000 yuan
; the circumstances are serious, the administrative authorities for industry and commerce shall revoke the business license.
Article 40 If the franchisor violates the provisions of these Measures in advertising, it shall be dealt with in accordance with the "Advertising Law of the People's Republic of China and the State of China" and
other relevant laws, administrative regulations and rules.
Chapter IX Supplementary Provisions
Article 41 These Measures shall be interpreted by the Ministry of Commerce.
Article 42 These Measures shall come into force on February 1, 2005, the former Ministry of Domestic Trade issued the "Commercial Franchise Management
Measures for Trial Implementation" shall be repealed at the same time.
Regulation 2
Code of Conduct for Franchising Business of China Chain Store Management Association (CCMA)
Chapter 1 General Principles
Article 1 The members of CCMA shall abide by the laws and regulations of the country in carrying out franchising business;
Article 2 The member enterprises shall abide by the principle of fairness and honesty in carrying out franchising business;
Article 3 The members shall not The franchise contract shall be in writing and specify the rights and obligations of each party;
Article 6 The franchisor and the franchisee shall make every effort to resolve disputes in good faith and in an amicable manner. If necessary, consideration may be given to resolving disputes through mediation, arbitration or even litigation.
Chapter 2 Franchisee (Headquarters)
Article 1 In the process of recruiting franchisees, the franchisor shall provide potential franchisees with as much information as possible in writing
including, but not limited to, the franchisor's basic information, the basic contents of the contract, the operation of the stores that have already been opened, the amount of investment required for franchising, and the forecast of income
but not limited to this information;< /p>
Article 2 The franchisor shall provide the potential franchisees with the best possible information in writing; < /p>
Article 3 The franchisor shall not be responsible for any loss or damage caused to the franchisor.
Article 2 The information provided to potential franchisees, including advertising and other promotional materials, shall be true and accurate, and any figures or information directly or indirectly
containing historical or projected investment income or business performance shall be clearly sourced and based on; the amount of the franchisee's investment
and its composition shall be described in detail;
Article 3 The franchisor shall encourage potential franchisees and existing franchisees to make contact with the franchisee. existing franchisees to make contact with them so that they may have a deeper understanding of the franchised
business they will be engaged in;
Article 4 When selecting franchisees, the franchisor shall focus on their ability, character, financial strength, and enterprise, etc., and shall not discriminate on the basis of gender, ethnicity, etc.
Article 5 In order to ensure that the products and services sold by franchises are of good In order to ensure that the products and services sold by the Franchisee remain of good quality, the Franchisor shall continually supervise the Franchisee;
Article 6 In order to enable the Franchisee to continue to receive appropriate revenues, the Franchisor shall continually improve its products, services, and marketing, and shall provide the Franchisee with guidance, assistance, and reasonable training;
Article 7 The Franchisee shall provide the Franchisee with high quality materials, products, and services in accordance with the Contract;
Article 8 The Franchisee shall provide the Franchisee with high quality materials, products, and services; and
Article VIII. The Franchisor shall be able to receive and answer information from the Franchisee in a timely manner, and shall establish a mechanism to enhance communication,
understanding and a cooperative system between the two parties.
Chapter 3 Franchisee
Article 1 The Franchisee shall comply with the laws and regulations of the country when operating the franchised business;
Article 2 The Franchisee shall disclose in detail and frankly all the information deemed indispensable in the selection of a suitable Franchisee by the Franchisor;
Article 3 It shall carry out its business activities strictly in accordance with the provisions of the Franchisee Contract and the standards of the Manual. The Franchisee shall conduct business in strict accordance with the provisions of the Franchise Agreement and the standards of the Manual, and shall accept all required training and the Franchisor's
guidance and supervision, in order to safeguard the reputation and uniform image of the System;
Article 4 The Franchisee shall abide by the principle of confidentiality of all information relating to the Franchise, regardless of whether or not the Franchise Relationship is terminated, and shall not, except with the written consent of the Franchisor, disclose, or license to disclose to the relevant persons, any of the information relating to the Franchise; and Such information shall not be disclosed or licensed to related persons except with the written consent of the Franchisee;
Article V. Payment of franchise fees, royalties and other fees due on time.
Chapter 4: Relevant Professional Organizations
Article 1 Acting in good faith and fairness, the Client is encouraged to strictly comply with this Code of Ethics, regardless of whether or not the Client is a member of the China Association of Chain Store Management (CACM). If a client's commission or request violates this Code of Ethics, the services provided to the client shall be stopped immediately;
Article 2: Accept only those commissions for which the client is competent;
Article 3: Adhere to the position of independence and objectivity in order to ensure the fairness and professionalism of the advice provided;
Article 4: Abide by the principle of confidentiality, and do not disclose or
agree with the client to disclose any information obtained during the course of the performance of the duties of the Client without the consent of the Client. All information obtained in the course of performing the duties shall not be disclosed or
licensed without the consent of the client.
Regulation 3
Opinions on the Management Standards of Chain Stores of the Ministry of Domestic Trade (Ministry of Domestic Trade, Government and Law [1997] No. 24)
Article 1: Chain stores refer to a number of stores dealing with the same kind of commodities and using a unified trade name, and under the management of the same head office, adopting
unified purchasing or granting franchises to achieve economies of scale. The form of business organization.
Article 2 Chain stores should be composed of more than 10 stores, the implementation of standardized management, must achieve unified procurement and distribution of goods,
unified management specifications, procurement and sales separation. All commodities should be purchased through the headquarters of the unified procurement, part of the goods can be based on the reasonable flow of goods
and quality and freshness of the principle of direct delivery by the supplier to the store, the rest of the headquarters of the unified distribution.
Article III chain stores by the headquarters, stores and distribution centers.
(a) headquarters is the core of the chain store management, must have the following functions: procurement and distribution, financial management, quality control
management, business guidance, market research, product development, promotion planning, education and training.
(b) The store is the foundation of the chain, the main responsibility is to follow the instructions of the headquarters and the requirements of the service norms, undertake daily sales
business.
(c) Distribution center is the chain's logistics institutions, undertake the stores required for merchandise inlet, inventory, distribution, processing,
set allocation, transportation, delivery and other tasks. Distribution centers are mainly for the chain enterprise services, but also for the community.
Article IV includes the following three forms of chain stores:
(a) direct chain. Chain stores are wholly owned by the headquarters of the stores opened or holding, under the direct leadership of the headquarters of the unified operation;
(B) voluntary chain. Chain stores are independent legal person, the ownership of their respective assets unchanged, under the guidance of the headquarters of the
guide **** with the business;
(C) franchise chain (or franchise chain). Chain stores signed a contract with the headquarters, to obtain the use of headquarters trademarks, trade names
, business technology and sales headquarters to develop goods franchise, the right to concentrate on the headquarters.
Direct chain, voluntary chain and franchise chain of these three forms, can be in a chain of enterprises cross each other.
Article 5 The form of chain management can be implemented in supermarkets, convenience stores, specialty stores, shopping malls and other forms of business
.
Article 6 The chain supermarket stores business area is generally more than 500 square meters; business commodities to meat, eggs, vegetables
vegetables, fruits, aquatic products, food and seasoning, grain and oil and its products, general merchandise, which operates in the meat, eggs, vegetables,
fruits, aquatic products, and grain and oil food (including the above commodities in the form of live, fresh and frozen, Semi-finished products, cooked products form, etc.) of the area
accounts for more than 30% of the total business area; open shelves self-selected sales, the exit of the centralized cash register.
Article VII chain convenience stores operating commodities to food, fast food, beverages, small general merchandise, side dishes, seasonings, food and oil products as
main; to open shelves to choose to sell goods, the main business hours in more than 16 hours.
Article VIII of the chain of specialized stores and the main categories of goods and associated goods accounted for more than 90% of all business varieties; to open-shelf sales.
Article IX Chain shopping mall store business area is generally more than 3,000 square meters; business commodities to daily necessities, clothing
wear, household appliances, food is the main.
Article 10 chain supermarkets, convenience stores and shopping malls must use electronic cash registers, and the gradual establishment of point of sale (PO
S) and electronic ordering (EOS) system, improve the commercial integrated information management network (MIS) system. Chain supermarkets and shopping malls
sale of non-fresh goods, bar code utilization rate (including store-made code) to reach more than 90%.
Article XI franchise and voluntary chain headquarters and stores signed a contract, should include the following matters; authorization to use the headquarters of the
trademarks, trade names of the content; unified procurement, distribution of goods content; the provision of business technology content; the establishment of the franchise location and the target
target market content; store decoration and design aspects of the contents of the promotional aspects of the contents of the quality control
The content of the headquarters of the financial monitoring of
stores and the collection of franchise fees, management fees, etc.; fair competition and the protection of intellectual property rights;
contract period, renewal and termination of the content; the content of the contract on the violation of penalties and so on.
Article XII of the catering industry, service industry and the sale of means of production chain stores, the competent authorities of the industry with reference to the views of this specification to make separate provisions.