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
1.Conditions for Franchising:
- The franchisor shall be entitled to franchise a business if it has been operating for at least 01 year.
Legal basis: Article 5 of Decree No. 35/2006/ND-CP as amended by Article 8 of Decree No. 08/2018/ND-CP.
According to the above regulation, the condition of "having been in operation for at least 01 year" applies to the business system intended for franchising, not to the trader itself.
Therefore, the period of 01 year shall be counted from the date of issuance of the Business Location Registration Certificate for the first store in the system, and such store as well as the entire system must actually be in business operation in practice.
2.Registration of Commercial Franchising:
- In the following cases, registration of commercial franchising is not required:
- Domestic commercial franchising;
- Vietnam-to-overseas commercial franchising.
Legal basis: Clause 1, Article 3 of Decree No. 120/2011/ND-CP.
As per the information provided, the Company only intends to franchise within provinces and cities in Vietnam. Therefore, the Company is not required to carry out franchising registration procedures.
However, pursuant to Clause 2, Article 3 of Decree No. 120/2011/ND-CP: “Cases in which registration of commercial franchising is not required must be reported to provincial-level Industry and Trade Departments.”
Accordingly, in the Company’s case, it must implement the reporting regime to the Industry and Trade Departments.
Note: Periodic reports to the Department of Industry and Trade must be submitted no later than January 15 each year, using the form provided in Part B, Appendix III of Circular No. 09/2006/TT-BTM.
Consultation: Franchise services
