Franchise Registering Procedures

The franchise registering procedures helps businesses expand their market reach. To ensure rights are protected and to eliminate potential disputes related to intellectual property ownership, the franchising procedure must be registered. Therefore, understanding the procedure for registering a franchise at the Intellectual Property Office saves time and costs for all parties involved. In the following article, Long Phan will guide you through the detailed steps of the franchise registration procedure in accordance with legal regulations and the business objectives of the enterprise.

Current franchise registering procedures

Conditions for Franchising

For the Franchisor

According to Article 5 of Decree 35/2006/ND-CP dated March 31, 2006, by the Government, which provides detailed regulations on commercial activities related to franchising and has been amended by Article 8 of Decree 08/2018/ND-CP, the conditions for a franchisor are as follows: A business entity is allowed to grant a franchise if the business system intended for franchising has been operational for at least 1 year. This means that the franchisor must have been operating for at least 1 year in the field they intend to franchise.

For the Franchisee

According to Article 6 of Decree 35/2006/ND-CP, a business entity was required to have a business registration in a field that matched the franchise’s subject matter. However, this condition was abolished by Article 9 of Decree 08/2018/ND-CP. Therefore, current legislation does not specify conditions for the franchisee.

Conditions for franchising

Franchise registering procedures

Registration Documents

According to Point b, Clause 3, Article 19 of Decree 35/2006/ND-CP, and Clauses 2 and 3 of Section II of Circular 09/2006/TT-BTM dated May 25, 2006, regarding the documents required for the franchise registration procedure at the Ministry of Industry and Trade (formerly known as the Ministry of Commerce), the required documents include:

• Application form (Form MĐ-1 in Appendix II issued with Circular 09/2006/TT-BTM);
• Franchise introduction document (Form in Appendix III issued with Circular 09/2006/TT-BTM);
• A copy of the Business Registration Certificate or equivalent document of the foreign trader, certified by the competent authority where the foreign trader is established, in cases where franchising is from abroad into Vietnam;
• A copy of the industrial property protection certificate in Vietnam or abroad, in cases where the right to use industrial property objects with a protection certificate is transferred;
• Documents proving approval for franchising rights in cases where the registering trader is a secondary franchisor.

Procedure

To carry out the franchise registration procedure, the prospective franchisor must register their franchise activities with the competent authority. Specifically, based on Article 20 of Decree 35/2006/ND-CP and Clauses 5 and 6 of Section II of Circular 09/2006/TT-BTM, the franchise registration process includes the following steps:

1. Submit the franchise registration documents to the competent authority.
2. The registration authority receives the documents, checks them, and makes one of the following decisions:
   • Issue a receipt to the applicant if the documents are complete and valid;
   • Guide and request the individual or organization to complete or supplement the documents if they are incomplete or invalid. The authority must request document completion within 2 working days from the date of receipt and provide a written notice.
3. Register the franchise activity in the Franchise Activity Register:
   • Within 5 working days from the date of receipt of valid documents, the registration authority is responsible for registering the franchise activity in the Franchise Activity Register and informing the franchisor in writing;
   • In case of refusal to register the franchise activity, within 5 working days from the date of receipt of valid documents, the registration authority must issue a written notice specifying the reasons for the refusal.

Authority

According to Article 18 of Decree No. 35/2006/ND-CP and Section I of Circular 09/2006/TT-BTM, the only competent authority for handling franchise registrations is currently the Ministry of Industry and Trade (formerly known as the Ministry of Commerce).

Franchise Consulting Services

To provide the best support for clients in the franchise registering procedures, Long Phan offers the following services:

• Consulting on regulations, documentation, and franchise registering procedures;
• Assisting clients in drafting documents and registration files;
• Representing clients in dealings with registration authorities;
• Supporting clients in drafting and selecting suitable commercial contracts;
• Advising on solutions for handling disputes that may arise during the franchise registering procedures.

Franchise registration consulting

Given the complex nature of the franchise registration procedure, it is essential for those involved to have a thorough understanding of the relevant regulations. Mastering this process not only ensures legal compliance but also significantly impacts the success of a business agreement. If readers have any questions or need advice on the franchise registering procedures, please contact us via Hotline: 0906.735.386.