What is franchising? The so-called franchising means that the enterprise organization authorizes the service mark to the franchisee, so that the franchisee can use the image, brand, reputation, etc. of the franchise headquarters in the commercial consumer market. Attract consumers to spend money. Moreover, before the franchisee starts a business, the franchise headquarters will first teach the franchisee its know-how, technology, and other experience and assist in starting a business and operating the business. Both parties must sign a franchise contract to achieve the profit of the business. *Same cooperation goals; and the franchise headquarters can collect franchise fees, deposits, royalties, etc. from franchisees due to different franchise properties.

The meaning of "franchise" is extended

Franchise: that is, the headquarters with technical and management experience will guide and teach the technical experience of various operations of the franchise store and collect a certain percentage of royalties. And guidance fees, this contractual relationship is a franchise. The franchise headquarters must have a complete and effective set of operational technical advantages to provide professional guidance so that the franchise stores can operate quickly and gain benefits from it, so that the franchise network can grow day by day. Therefore, how to inherit business technology is the key to franchising. Chain Franchise There is an ongoing contractual relationship between the chain head office and the franchise stores. According to the contract, the head office must provide a unique business privilege, plus assistance in personnel training, organizational structure, business management, and product supply and sales; and the franchise stores must also pay corresponding compensation. Franchise stores are engaged in selling the same goods or services under the same image and goodwill as the head office. Compared with the rights granted by the head office, franchise stores must invest corresponding business funds, including franchise fees, royalties, and contract fees, including start-up funds.

Franchise operation: means that the franchise owner (franchisor) allows the franchisee (franchise) to use its name, logo, proprietary technology, and products for a fee in a contractual manner. and operational management experience and other organizational business models for engaging in business activities. The main advantage is that the franchisor can achieve the purpose of large-scale operation by only investing in brand, management experience, etc., which can not only obtain returns in the short term, but also rapidly increase intangible assets. Franchisees can get help and support from experienced franchisors in terms of site selection, design, staff training, marketing, etc., so that their operations can quickly move into a virtuous cycle.

my country has officially implemented the "Commercial Franchise Management Measures" to regulate domestic chain franchises

Ministry of Commerce Order No. 25, 2004

Effective February 1, 2005 Officially implemented

Chapter 1 General Provisions

Article 1: These Measures are formulated to regulate commercial franchising activities, protect the legitimate rights and interests of the parties, and promote the healthy and orderly development of commercial franchising.

Article 2 The term "commercial franchising" (hereinafter referred to as "franchising") as mentioned in these Measures means that by signing a contract, the franchisor will grant the trademark, trade name, business model and other business resources that it has the right to grant to others for use. Used by the franchisee; the franchisee engages in business activities under a unified operating system in accordance with the contract and pays franchise fees to the franchisor.

Article 3 These Measures shall apply to franchise activities carried out within the territory of the People’s Republic of China.

Article 4: The franchisor may, in accordance with the contract, directly grant the franchise right to the franchisee, and the franchisee invests in establishing a franchise outlet and carries out business activities, but may not sub-license the franchise right again; or The exclusive franchise rights in a certain area are granted to the franchisee, and the franchisee can grant the franchise rights to other applicants, or set up its own franchise outlets in the area.

Article 5 Franchise operations shall abide by the laws and regulations of the People's Republic of China, follow the principles of voluntariness, fairness, honesty, and credibility, and shall not damage the legitimate rights and interests of consumers.

The franchisor shall not illegally engage in pyramid schemes in the name of franchising.

The franchisor’s business activities in the form of franchising shall not lead to market monopoly or hinder fair competition.

Article 5 Supplementary Clauses:

Regarding the online tutoring project of China Education Development Network, special provisions allow internal competition in the same region after authorization.

Article 6 The Ministry of Commerce shall supervise and manage franchise activities nationwide, and the competent commerce departments at all levels shall supervise and manage franchise activities within their jurisdiction.

Chapter 2 Franchise Parties

Article 7 The franchisor shall meet the following conditions:

(1) An enterprise or other economic organization established in accordance with the law;< /p>

(2) Have the right to license others to use trademarks, trade names, business models and other business resources;

(3) Have the ability to provide long-term business guidance and training services to the franchisee ;

(4) Own at least two direct-operated stores in China that have been operating for more than one year or directly-operated stores established by its subsidiaries or holding companies;

(5) For franchising that requires the franchisor to supply goods, the franchisor should have a stable goods supply system that can guarantee quality, and be able to provide related services.

(6) Have a good reputation and have no record of engaging in fraudulent activities through franchising.

Article 8 The franchisee shall meet the following conditions:

(1) An enterprise or other economic organization established in accordance with the law;

(2) Ownership and franchise Funds, fixed locations, personnel, etc. suitable for operation.

Article 9 The franchisor shall enjoy the following rights:

(1) In order to ensure the unity of the franchise system and the consistency of the quality of products and services, the franchisee shall be treated as stipulated in the contract. Supervise the business activities;

(2) For franchisees who violate the provisions of the franchise contract, infringe upon the legitimate rights and interests of the franchisor, and destroy the franchise system, terminate their franchise qualifications in accordance with the contract;

(3) Collect franchise fees and deposits in accordance with the contract;

(4) Other rights stipulated in the contract.

Article 10 The franchisor shall perform the following obligations:

(1) Disclose information in a timely manner in accordance with the relevant provisions of these Measures;

(2) Transfer the franchise rights to Authorize the franchisee to use and provide a business logo and operation manual representing the franchise system;

(3) Provide the franchisee with the sales, business or technical guidance and training necessary to carry out the franchise and other services;

(4) Provide goods supply to the franchisee in accordance with the contract. Except for exclusive goods and goods that must be provided by the franchisor or the supplier designated by the franchisor to ensure the quality of the franchise, the franchisor may not force the franchisee to accept the supply of its goods, but may stipulate the quality standards that the goods should meet, or propose Several suppliers for the franchisee to choose from;

(5) The franchisor shall be responsible for guaranteeing the product quality of its designated suppliers;

(6) Promotion and advertising agreed in the contract Publicity;

(7) Other obligations stipulated in the contract.

Article 11 The franchisee shall enjoy the following rights:

(1) Obtain the trademark, trade name, business model and other business resources authorized by the franchisor; (2) Obtain the franchisor’s The training and guidance provided; (3) Obtain the supply of goods provided or arranged by the franchisor in a timely manner according to the price agreed in the contract; (4) Obtain unified promotional support from the franchisor; (5) Other rights stipulated in the contract.

Article 12 The franchisee shall perform the following obligations:

(1) Carry out business activities in accordance with the contract; (2) Pay franchise fees and deposits; (3) Maintain the unity of the franchise system and shall not transfer the franchise right without the permission of the franchisor; (4) Provide the franchisor with the true operating conditions, financial status and other contracted information in a timely manner; (5) Accept the guidance and supervision of the franchisor ; (6) Keep the franchisor’s business secrets; (7) Other obligations stipulated in the contract.

Chapter 3 Franchise Contract

Article 13 The content of the franchise contract shall be agreed upon by the parties and generally includes the following contents:

(1) The parties’ Name and address;

(2) The content, term, location and whether it is exclusive to use the franchise;

(3) The type, amount, and Payment method and deposit collection and return method;

(4) Confidentiality clause;

(5) Franchise product or service quality control and responsibility;

(6) Training and guidance;

(7) Use of trade names;

(8) Use of trademarks and other intellectual property rights;

(9) Consumption Complaints;

(10) Publicity and advertising;

(11) Change and termination of contract;

(12) Liability for breach of contract;

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(13) Dispute resolution clauses

(14) Other clauses agreed by both parties.

Article 14 Franchise fee refers to the fee paid by the franchisee to obtain the franchise right, including the following types:

(1) Franchise fee: refers to the fee paid by the franchisee A one-time fee paid to the franchisor to obtain the franchise right;

(2) Royalty fee: refers to the periodic payment to the franchisor by the franchisee according to a certain standard or ratio during the use of the franchise right. Fees paid;

(3) Other agreed fees: refer to other fees paid by the franchisee to the franchisor for obtaining relevant supplies of goods or services provided by the franchisor in accordance with the contract.

The deposit refers to a certain fee charged by the franchisor from the franchisee to ensure that the franchisee performs the franchise contract. Upon expiration of the contract, the security deposit shall be returned to the franchisee.

The parties to the franchise shall agree on the franchise fee and deposit based on the principles of fairness and reasonableness.

Article 15 The term of a franchise contract is generally not less than three years.

After the franchise contract expires, the franchisor and the franchisee may negotiate and determine the renewal conditions of the franchise contract based on the principles of fairness and reasonableness.

After the franchise contract is terminated, the original franchisee shall not continue to use the franchisor's registered trademark, trade name or other marks without the consent of the franchisor, and shall not apply to register the franchisor's registered trademark as For similar categories of goods or service trademarks, words that are identical or similar to the franchisor's registered trademark shall not be applied for registration as trade names in the company name, and signs that are identical or similar to the franchisor's registered trademark, trade name or store decoration shall not be used for the same or similar goods or services.

Chapter 4 Information Disclosure

Article 17 The franchisor and the franchisee shall disclose relevant information in a timely manner before signing a franchise contract and during the franchising process.

Article 18 The franchisor shall provide the applicant with true and accurate basic information about the franchise and the text of the franchise contract in writing 20 days before the date of formal signing of the franchise contract.

Article 19 The basic information disclosed by the franchisor shall include the following:

(1) The franchisor’s name, residence, registered capital, business scope, and persons engaged in franchising Major matters such as age, as well as the content of financial reports audited by an accounting firm and basic information such as tax payments;

(2) The number of franchisees, distribution locations, operating conditions, and franchise outlet investment budget statements, etc. , the proportion of franchisees who have terminated the franchise contract to the total number of franchisees;

(3) Registration, licensing and litigation of trademarks; information on trade names, business models and other business resources;

(3) Trademark registration, licensing and litigation; trade names, business models and other relevant information; p>

(4) Type, amount, collection method and deposit return method of franchise fees;

(5) All cases involving litigation in the past five years;

( 6) Various goods supplies or services that can be provided to the franchisee, as well as additional conditions and restrictions;

(7) Proof of ability to provide training and guidance to the franchisee and the ability to provide training or The actual situation of the guidance;

(8) The basic information of the legal representative and other principal persons in charge, whether they have been criminally punished, whether they have ever been personally responsible for the bankruptcy of the enterprise, etc.;

(9) Other information disclosed by the franchisor at the request of the franchisee.

If the franchisee suffers economic losses due to insufficient information disclosure or provision of false information, the franchisor shall bear liability for compensation.

Article 20 The franchisee shall truthfully provide information about its own business capabilities as required by the franchisor, including subject qualification certificates, credit certificates, property rights certificates, etc. During the franchising process, the true operating conditions and other contractually agreed information shall be provided in a timely manner as required by the franchisor.

Article 21 During the franchise period and after the termination of the franchise contract, the franchisee and its employees shall not disclose, use or allow others to use the franchisor’s information in their possession without the consent of the franchisor. Trade secrets.

Article 22 Those persons and applicants who have not authenticated the franchise contract with the franchisor but have learned the franchisor’s business secrets through the franchisor’s information disclosure shall bear the obligation to keep confidentiality. The franchisor's trade secrets may not be disclosed, revealed to others or transferred without the franchisor's consent.

Chapter 5 Advertising

Article 23 When the franchisor publicizes, promotes and sells franchise rights, the advertising content shall be accurate, true and legal, and shall not be deceptive in any way. , omitting important facts or making statements that may be misleading.

Article 24 The franchisor and the franchisee’s advertising materials that directly or indirectly contain records, figures or other relevant information of the franchisor’s operating income or income must be true and the regions and areas involved must be The time should be clear.

Article 25 The franchisor and the franchisee shall not imitate other people's trademarks, advertising images and terms or other identification marks in any manner that may mislead, deceive or cause confusion.

Article 26 During franchise promotion activities, the franchisor shall not artificially exaggerate the benefits brought by the franchise or intentionally conceal situations that may objectively affect the interests of others due to the franchise.

Chapter 6 Supervision and Management

Article 27: Commercial authorities at all levels shall strengthen the management and coordination of franchise activities within their own administrative regions and guide local industry associations (chambers of commerce) Carry out work.

Commercial authorities at all levels should establish credit files for franchisors and franchisees and promptly publish the list of illegal enterprises.

Article 28 Franchise industry associations (chambers of commerce) shall formulate industry norms in accordance with these Measures, carry out industry self-discipline, provide relevant services to franchise parties, and promote industry development.

Article 29 The franchisor shall, in January of each year, report the status of the franchise contract signed in the previous year to the competent commercial department of its location and the competent commercial department of the franchisee's location for filing. The local commercial department shall report the filing status to the higher-level commercial department.

Article 30 If patent licensing is involved in franchise activities, a patent licensing contract shall be signed in accordance with the relevant provisions of the Patent Law of the People's Republic of China and its implementation rules, and a patent licensing contract shall be signed in accordance with the Patent Law of the People's Republic of China and its implementation rules. The "Measures for the Administration of Registration of Implementation Licensing Contracts" stipulates the handling of registration matters.

Article 31 Before carrying out franchising activities, the franchisor shall handle the filing of trademark license contracts in accordance with the provisions of the Trademark Law of the People's Republic of China and its implementation regulations.

Chapter 7 Special Provisions for Foreign-Invested Enterprises

Article 32 Foreign-invested enterprises shall not engage in prohibited businesses in the "Guidance Catalog of Industries for Foreign Investment" through franchising.

Article 33 If a foreign-invested enterprise engages in commercial activities through franchising, it shall apply to the original approval department to increase the business scope of "engaging in commercial activities through franchising" and submit the following materials:< /p>

(1) Application letter and board resolution;

(2) Enterprise business license and foreign-invested enterprise approval certificate (copy);

(3) Contract , Articles of Association Amendment Agreement (foreign-invested enterprises only submit articles of association modification);

(4) Relevant documents proving compliance with the provisions of Article 7 of these Measures;

(5) Reflecting these Measures Basic information specified in Article 19;

(6) Franchise contract sample;

(7) 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 the applicant is approved, he should go through the enterprise registration change procedures with the industrial and commercial administration authorities within one month after receiving the "Foreign-invested Enterprise Approval Certificate" renewed by the approval department.

Article 34 If a foreign-invested enterprise is approved to engage in commercial activities in the form of a franchise, it shall report the status of the franchise contract signed in the previous year to the original approval department and the franchisee in January of each year. Register with the local commercial department.

Article 35 When foreign investors establish foreign-invested enterprises that specialize in commercial activities through franchising, in addition to complying with these Measures, they must also comply with the provisions of relevant laws, regulations and rules on foreign investment.

Article 36 Foreign-invested enterprises that have already engaged in commercial activities in the form of franchising before the implementation of these Measures shall file the status of their business operations with the original approval department. Those who continue to engage in commercial activities in the form of franchising shall , relevant procedures should be handled in accordance with the procedures stipulated in this chapter.

Article 37 Hong Kong, Macao and Taiwan-invested enterprises engaging in commercial activities in the form of franchising in the mainland shall be governed by the provisions of this chapter.

Chapter 8 Legal Responsibilities

Article 38 Anyone who violates the provisions of Articles 7 and 8 of these Measures shall be ordered to make corrections by the competent commerce department and may be fined 30,000 yuan. The following fines shall be imposed; if the circumstances are serious, the business license shall be revoked by the industrial and commercial administration authorities.

Article 39: Anyone who fails to disclose information in accordance with the provisions of these Measures shall be ordered to make corrections by the competent commerce department and fined not more than 30,000 yuan; if the circumstances are serious, the business license shall be revoked by the industrial and commercial administration authority.

Article 40 If the franchisor conducts advertising in violation of the provisions of these Measures, it shall be dealt with in accordance with the Advertising Law of the People's Republic of China and other relevant laws, administrative regulations and rules.

Chapter 9 Supplementary Provisions

Article 41 The Ministry of Commerce is responsible for the interpretation of these Measures.

Article 42 These Measures will come into effect on February 1, 2005, and the "Commercial Franchise Management Measures (Trial)" issued by the former Ministry of Domestic Trade will be abolished at the same time.

Things to note when choosing a franchise system

Things to note when choosing a franchise system In recent years, the domestic chain franchise industry has mushroomed, attracting a large number of investors and franchisees to join this industry. However, for franchisees who are interested in investing, how should they choose the best strategy when faced with numerous franchise brands? Mr. Gui Shiping, Secretary General of the Franchise Promotion Association of the Republic of China, provides the following points for reference.

1. You must choose a chain system with considerable experience, including the length of operation and the number of stores; if it is a brand that has not been established for a long time and has few stores, due to its own chain experience If these are not enough, if franchisees join hastily, the risk will naturally be higher.

2. The technical difficulty cannot be too high.

General franchisees are usually laymen, so industries with lower technical skills are more suitable for franchises (such as supermarkets). The higher the technical difficulty, the longer the training time; usually industries with higher technical skills, such as Hairdressing, glasses, etc. are more suitable for internal entrepreneurship than franchising.

3. Pay attention to the development trend of the selected industry. Is it to grow in stability? Or is it declining?

Especially for some popular industries, the business was booming when they first joined, but soon after the craze passed, the business plummeted.

Four. Personal interests must be considered. Since each industry has different industry characteristics, it is best for franchisees to choose an industry that has similar interests to them. Don’t just focus on making money and ignore personal interests.

5. The competitiveness of the headquarters in the industry must be considered. This involves how much support the headquarters provides to the franchise stores? Because competition among peers will inevitably involve the quality of brands, the competitiveness of the first brand will naturally be stronger, while the competitiveness of relatively smaller brands will naturally be weaker.

6. Inquire about the franchise stores that have been established. If it is a brand with a sound franchise system, they should be happy to inform franchisees of the addresses and phone numbers of all stores. Franchisees can first inquire about these existing stores. Relevant information, and the information obtained in this way is often the most authentic, and franchisees can also learn about the general operating conditions in the future.

In addition to the above six points, of course the franchisee's own manpower and funds are all factors that must be considered when joining.

The most important thing is to write down your rights and obligations clearly when signing the contract. Don’t be confused later. Write the contract clearly.