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Brand franchising is an effective business strategy, bringing great benefits to both franchisors and franchisees. To successfully implement this model, the parties need to meet a number of important conditions. The article below will analyze in detail the legal conditions and franchise implementation process in Vietnam today.
Franchising is a form of business that allows the franchisee to use the franchisor’s brand, model and business system for a certain period of time at an agreed cost. According to Article 284 of the Law on Commercial 2005, commercial franchising is defined as a commercial activity, whereby the franchisor allows and requires the franchisee to personally conduct the purchase and sale of goods and provide services according to the terms of the contract conditions of the franchisor.
This form helps businesses expand their business networks quickly without investing too much capital. Franchisees benefit from the brand, experience and systems that have been built. In Vietnam, franchising is increasingly developing in many fields such as cuisine, retail, and education.
However, to successfully implement brand franchising, both the franchisor and the franchisee need to meet certain legal conditions according to Vietnamese law. Compliance with these regulations helps protect the interests of all parties and ensures business operations run smoothly.
According to the provisions of Article 5 of Decree No. 35/2006/ND-CP amended by Article 8 of Decree 08/2018/ND-CP, the franchisor only needs to meet the following conditions:
Traders are allowed to grant commercial rights when the business system intended to be used for franchising has been in operation for at least 1 year.
Currently, there is no law specifically regulating the conditions of franchisees. In general, the franchisee also needs to meet a number of conditions to participate in specific commercial activities as follows:
Fully meeting these conditions not only helps the franchisee meet legal requirements but also increases the chance of success in operating the franchise business model.
The Ministry of Industry and Trade is the agency that registers commercial franchising activities in the following cases:
Reference content: Section I Circular 09/2006/TT-BTM, Section a1 Point a Clause 1 Article 2 Circular 03/2024/TT-BCT, Point b Clause 1 Article 2 Circular 03/2024/TT-BCT.
To carry out brand franchising, parties need to comply with the registration procedures prescribed by law:
Step 1: Prepare registration documents, franchise registration documents include:
Step 2: Submit application:
Enterprises submit applications to the Ministry of Industry and Trade.
Step 3: Processing documents:
Step 4: Get results:
Complying with this registration process helps ensure the legality of franchise activities, protects the rights of all parties and creates favorable conditions for business expansion.
Reference content: Section II Circular 09/2006/TT-BTM.
Brand franchising is not only an opportunity to expand the market, but also brings significant economic benefits to both the franchisor and the franchisee. With a team of experienced experts, Long Phan is committed to providing consulting services on brand franchising to help customers save time, costs and minimize legal risks during the franchising process.
The services we provide include:
Brand franchising brings many benefits to both the franchisor and the franchisee, helping to expand the business quickly. However, to implement successfully, the parties need to comply with the law and fully meet the necessary conditions. Customers who need detailed consulting support on the brand franchising process, please contact Long Phan via the hotline: 0906735386 for dedicated support.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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