Question: Our company is located in Ho Chi Minh City and operates in the food service industry. We have also registered our trademark. Currently, we aim to expand to other provinces and cities in the country by franchising to other parties. Could you please advise on any conditions required for our catering service and if there is any registration necessary?
Answer
- As a condition for franchising, the franchisor (your company) is only allowed to grant commercial rights when the business system intended to be used for franchising has been in operation for at least 1 year (Article 5 of Decree 35/2006/ND-CP amended by Article 8 of Decree 08/2018/ND-CP).
- According to the information provided, if the Company only intends to franchise within domestic provinces and cities, it is not required to register for franchising but must comply with the reporting regime to the Department of Industry and Trade (Clause 2, Article 3 of Decree 120/2011/ND-CP) and periodically report to the Department of Industry and Trade no later than January 15 every year, according to the form in Part B, Appendix III of Circular 09/2006/TT-BTM.
Thus, if your company wants to franchise domestically, the franchisor must have been in business for 1 year or more, and the company is not required to register for franchising but only needs to implement a notification regime and report to the Department of Industry and Trade.
For reference: https://sblaw.vn/practice/franchise-legal-work/
