Shanghai Small Chili Hot Spicy Dip Join

Regulations on the administration of commercial franchising

Chapter I General Principles

Article 1 These Regulations are formulated for the purpose of regulating commercial franchising activities, promoting the healthy and orderly development of commercial franchising and maintaining market order.

Article 2 Commercial franchising activities within the territory of People's Republic of China (PRC) shall abide by these Regulations.

Article 3 Commercial franchising (hereinafter referred to as franchising) as mentioned in these Regulations refers to the business activities of an enterprise (hereinafter referred to as franchisor) with registered trademarks, enterprise logos, patents, proprietary technologies and other business resources, which are licensed to other operators (hereinafter referred to as franchisees) in the form of contracts, and the franchisees conduct business in a unified business model according to the contract and pay franchise fees to the franchisees.

No unit or individual other than an enterprise may engage in franchise activities as a franchisor.

Article 4 Franchising activities shall follow the principles of voluntariness, fairness, honesty and credibility.

Article 5 The competent department of commerce of the State Council shall be responsible for the supervision and management of franchise activities throughout the country in accordance with the provisions of these Regulations. The competent commercial departments of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government and the competent commercial departments of the municipal people's governments with districts shall be responsible for the supervision and administration of franchise activities within their respective administrative areas in accordance with the provisions of these regulations.

Article 6 Any unit or individual has the right to report any violation of these Regulations to the competent commercial department. After receiving the report, the competent commercial department shall handle it in time according to law.

Chapter II Franchising Activities

Article 7 A franchisee shall have a mature business model when engaging in franchise activities, and have the ability to continuously provide business guidance, technical support and business training for the franchisee.

Franchisees engaged in franchising activities shall have at least two direct stores, and the operating time shall exceed 1 year.

Article 8 The franchisor shall, within 15 days from the date when the franchise contract is first concluded, file with the competent commercial department in accordance with the provisions of these Regulations. Those who engage in franchise activities within the scope of provinces, autonomous regions and municipalities directly under the Central Government shall file with the competent commercial departments of the local people's governments of provinces, autonomous regions and municipalities directly under the Central Government; Those who engage in franchising activities across provinces, autonomous regions and municipalities directly under the Central Government shall file with the competent department of commerce of the State Council.

The franchisor shall submit the following documents and materials to the competent commercial department for the record:

(a) a copy of the business license or enterprise registration (registration) certificate;

(2) A sample franchise contract;

(3) Franchise operation manual;

(4) market plan;

(five) written commitments and relevant certification materials in accordance with the provisions of Article 7 of these regulations;

(six) other documents and materials stipulated by the competent department of commerce of the State Council.

Franchised products or services shall be approved according to law before they can be operated, and the franchisor shall also submit relevant approval documents.

Article 9 The competent commercial department shall put on record and notify the franchisor within 10 days from the date of receiving the documents and materials submitted by the franchisor that conform to the provisions of Article 8 of these Regulations. If the documents and materials submitted by the franchisor are incomplete, the competent commercial department may require it to submit supplementary documents and materials within 7 days.

Article 10 The competent commerce department shall publish the list of franchisers for filing on the government website and update it in time.

Article 11 To engage in franchise activities, the franchisor and the franchisee shall conclude a franchise contract in writing.

Franchise contracts shall include the following main contents:

(a) the basic information of the franchisor and franchisee;

(two) the content and duration of the franchise;

(three) the type, amount and payment method of franchise expenses;

(four) the specific contents and methods of business guidance, technical support, business training and other services;

(5) Quality, standard requirements and guarantee measures of products or services;

(6) Promotion and advertisement of products or services;

(7) Protection of consumers' rights and interests and liability for compensation in franchising;

(8) Alteration, rescission and termination of the franchise contract;

(9) Liability for breach of contract;

(ten) the way to solve the dispute;

(eleven) other matters agreed by the franchisor and the franchisee.

Article 12 The franchisor and the franchisee shall stipulate in the franchise contract that the franchisee may unilaterally terminate the franchise contract within a certain period after the franchise contract is concluded.

Article 13 The franchise period stipulated in the franchise contract shall not be less than 3 years. However, unless the franchisee agrees.

The provisions of the preceding paragraph shall not apply to the renewal of the franchise contract between the franchisor and the franchisee.

Article 14 The franchisor shall provide the franchisee with a franchise operation manual, and provide the franchisee with business guidance, technical support, business training and other services according to the agreed contents and methods.

Article 15 The quality and standards of franchised products or services shall meet the requirements of laws, administrative regulations and relevant state regulations.

Article 16 If the franchisor requires the franchisee to pay the fee before concluding the franchise contract, it shall explain the purpose of the fee and the conditions and methods of refund to the franchisee in writing.

Article 17 The promotional expenses charged by the franchisor from the franchisee shall be used according to the purposes agreed in the contract. The use of promotional expenses shall be disclosed to the franchisee in a timely manner.

Franchisors shall not cheat or mislead in promotional activities, and the advertisements they publish shall not contain the contents promoting the franchisee's income from franchise activities.

Article 18 Without the consent of the franchisor, the franchisee shall not transfer the franchise to others.

The franchisee shall not disclose or allow others to use the business secrets of the franchisee in his possession.

Article 19 A franchisor shall report the franchise contract signed in the previous year to the competent commercial department in the first quarter of each year.

Chapter III Information Disclosure

Article 20 A franchisor shall establish and implement a complete information disclosure system in accordance with the provisions of the the State Council Municipal Department of Commerce.

Article 21 The franchisor shall provide the information specified in Article 22 of these Regulations to the franchisee in writing at least 30 days before the date of concluding the franchise contract, and provide the franchise contract text.

Article 22 A franchisor shall provide the franchisee with the following information:

(1) The name, domicile, legal representative, registered capital, business scope and basic information of franchise activities of the franchisor;

(2) Basic information about the registered trademark, enterprise logo, patent, proprietary technology and business model of the franchisor;

(three) the type, amount and payment method of the franchise fee (including whether to collect the deposit and the conditions and methods for the return of the deposit);

(4) The prices and conditions of products, services and equipment provided to the franchisee;

(5) The specific content, mode of provision and implementation plan of continuing to provide services such as business guidance, technical support and business training for the franchisee;

(six) specific measures to guide and supervise the franchisee's business activities;

(seven) the investment budget of the franchise outlets;

(8) Evaluation of the number, geographical distribution and operating conditions of existing franchisees in China;

(9) Financial and accounting reports and summaries of audit reports audited by accounting firms in the last two years;

(ten) litigation and arbitration related to franchising in the last five years;

(eleven) whether the franchisor and its legal representative have any major illegal business records;

(twelve) other information stipulated by the competent department of commerce of the State Council.

Article 23 The information provided by the franchisor to the franchisee shall be true, accurate and complete, and shall not conceal relevant information or provide false information.

If the information provided by the franchisor to the franchisee changes significantly, it shall notify the franchisee in time.

If the franchisor conceals relevant information or provides false information, the franchisee may terminate the franchise contract.

Chapter IV Legal Liability

Article 24 If a franchisor does not meet the conditions stipulated in the second paragraph of Article 7 of these Regulations and engages in franchise activities, the competent commercial department shall order it to make corrections, confiscate its illegal income, impose a fine of 6,543,800 yuan and 500,000 yuan, and make an announcement.

Where other units and individuals other than enterprises engage in franchise activities as franchisees, the competent commercial department shall order them to stop illegal business activities, confiscate their illegal income and impose a fine of 6,543.8+10,000 yuan but not more than 500,000 yuan.

Article 25 Where a franchisor fails to file a record with the competent commercial department in accordance with Article 8 of these Regulations, the competent commercial department shall order him to file a record within a time limit and impose a fine of 6,543.38+0,000 yuan but not more than 50,000 yuan; Failing to put on record within the time limit, a fine ranging from 50,000 yuan to 6,543.8+10,000 yuan shall be imposed, and an announcement shall be made.

Article 26 Where a franchisor violates the provisions of Articles 16 and 19 of these Regulations, the competent commercial department shall order it to make corrections and may impose a fine of less than 1000 yuan; If the circumstances are serious, a fine ranging from 6,543,800 yuan to 50,000 yuan shall be imposed, and an announcement shall be made.

Article 27 Where a franchisor violates the provisions of the second paragraph of Article 17 of these regulations, the administrative department for industry and commerce shall order it to make corrections and impose a fine of not less than 30,000 yuan but not more than 654.38+10,000 yuan; If the circumstances are serious, a fine of 654.38+10,000 yuan but not more than 300,000 yuan shall be imposed, and an announcement shall be made; If a crime is constituted, criminal responsibility shall be investigated according to law.

Franchisors who use advertisements to deceive or mislead shall be punished in accordance with the relevant provisions of the Advertising Law.

Article 28 If a franchisor violates the provisions of Articles 21 and 23 of these Regulations and the franchisee reports it to the competent commerce department and it is verified, the competent commerce department shall order it to make corrections and impose a fine ranging from 6,543,800 yuan to 50,000 yuan; If the circumstances are serious, a fine ranging from 50,000 yuan to 654.38+10,000 yuan shall be imposed, and an announcement shall be made.

Twenty-ninth in the name of franchising to defraud others of property, which constitutes a crime, shall be investigated for criminal responsibility according to law; If it does not constitute a crime, it shall be punished by the public security organ in accordance with the provisions of the People's Republic of China (PRC) Public Security Administration Punishment Law.

Those who engage in pyramid selling activities in the name of franchising shall be punished in accordance with the relevant provisions of the MLM Regulations on Prohibiting MLM.

Article 30 If a staff member of the competent commerce department abuses his power, neglects his duty or engages in malpractices for personal gain, which constitutes a crime, he shall be investigated for criminal responsibility according to law; If it does not constitute a crime, it shall be punished according to law.

Chapter V Supplementary Provisions

Article 31 Where licensing of trademarks and patents is involved in franchise activities, it shall be handled in accordance with the provisions of laws and administrative regulations on trademarks and patents.

Thirty-second relevant associations shall, under the guidance of the the State Council Municipal Department of Commerce and in accordance with the provisions of these Regulations, formulate norms for franchise activities, strengthen industry self-discipline, and provide relevant services to the parties involved in franchise activities.

Article 33 Franchisors who have engaged in franchising activities before the implementation of these Regulations shall, within 1 year from the date of implementation of these Regulations, file with the competent commercial authorities in accordance with the provisions of these Regulations; Those who fail to put on record within the time limit shall be punished in accordance with the provisions of Article 25 of these regulations.

The provisions of the second paragraph of Article 7 of these Regulations shall not apply to the franchisers specified in the preceding paragraph.

The thirty-fourth of this Ordinance since May 6, 2007.

-

postscript

The original regulations are searched here by Baidu.

Google here.

Important points in the regulations are marked in bold red.

To sum up, it can be seen that a considerable number of so-called franchise stores in the market do not have basic franchise qualifications.

More is to provide false information, mislead and exaggerate business performance, just to circle money.

Many franchisees themselves do not have the ability to continue to operate, and joining investment is the main source of profit.

Logically speaking, franchisees may still have a chance to make a profit by joining their own stores, and more importantly, they are not profitable. How do franchisees make profits?

However, the replication of profitability is a very professional knowledge, which is not something that can be mastered by a casual shop.

Here I advise investors who want to join:

1. First, get the detailed information of the franchisee from the head office, including the address and telephone profitability. If you can't tell them the truth, there will be problems.

2. One word from the franchisee is better than a hundred words from the headquarters, but be careful whether this so-called "franchisee" is the child care of the headquarters.

3. Be sure to read the [Regulations on Franchise Management] of the Ministry of Commerce carefully and write any guarantee to yourself into the franchise contract.