“Franchise” means a commercial activity in which a franchisor allows and requests the franchisee to conduct the purchase and sale of goods or provision of services on his/her own business under certain conditions. What are those conditions and how do the procedures for the franchise from abroad into Vietnam proceed?

Hong Bang Law Firm with a team of experienced lawyers in enterprises and investments area would like to consult as follows:

Legal grounds

• Vietnam Commercial Law 2005
• Circular No. 04/2016/TT-BCT Circular amending and supplementing a number of Circulars of the Minister of Industry and Trade on administrative procedures in the field of e-commerce, chemicals, alcohol production and business, franchising, goods trading through the Goods Exchange, energy, food safety and electricity
• Decree No. 120/2011/ND-CP amending and supplementing administrative procedures in a number of Decrees of the Government detailing the Commercial Law
• Decree No. 35/2006/ND-CP on detailed provisions of commercial law on activities franchising
• Circular No. 09/2006/TT-BTM guiding the registration of the franchise

Conditions for francization activities

Conditions for Franchisor

Traders are permitted to grant commercial rights when they fully meet the following conditions:

• Vietnamese traders are primary franchisees from foreign franchisors or Vietnamese traders must do business by franchising method for at least 01year in Vietnam before re-granting commercial rights.
• Have registered franchising activities with competent authorities.
• Business goods and services subject to commercial rights do not violate regulations on goods and services permitted for franchising business

Conditions for the Franchisee

Traders are allowed to receive commercial rights when having an Enterprise Registration Certificate suitable to the subjects of commercial rights.

Goods and services permitted for franchising business

• Goods and services permitted for franchising are goods and services not on the list of goods and services restricted from the business.
• In case goods and services are on the list of goods and services restricted from business, the list of conditional business goods and services, enterprises can only do business after being granted business licenses or papers of equivalent value or full business conditions by the sector management agencies.

Composition of Application

• The composition of dossiers of registration of franchise from abroad into Vietnam includes:
• An application for registration of franchise activities;
• An introduction to the franchise;
• A certified copy of the Enterprise registration certificate (if expressed in a foreign language, it must be legalized, translated into Vietnamese and notified) or investment registration certificate in case of franchising from Vietnam;
• A copy of the industrial property rights protection certificate in Vietnam or abroad (in case it is in a foreign language, it must be translated into Vietnamese and notified);
• Proving documents for the approval of the original franchisor’s permission for re-grant franchise, in case the traders register their second-class franchising activities.

Procedures

Step 1: Apply

Franchising registration organizations shall submit dossiers directly or by post to competent agencies;

Step 2: Resolve the application

Competent agencies check the validity and completion of dossiers. In case the dossier is incomplete and valid, within 02 working days, the agency notified the organization in writing to complete the dossier.

In case the dossier is complete and valid, the competent authority will verify the contents of the dossier. If the dossier meets the conditions, within 05 working days, the agency issues a notice of approval of the franchise to the organization. If the application does not meet the eligibility, within 03 working days the agency responds in writing to the organization, stating the reason for not accepting.

Step 3: Get results

After completing the responsibility to pay the fee, the organization receives the Notice directly at the application office or by post.

Competent Agency: Ministry of Industry and Trade

Implementation Time: 05 working days from the date of receiving a valid dossier

Services provided by Hong Bang Law

With 10 years of experience in consulting in the field of foreign investment, we have supported many investors to carry out franchising procedures for big brands in Vietnam.

Hong Bang Law will accompany customers in the whole process of franchising with consulting and support services such as:

• Advising customers on conditions, documents and procedures for franchising;
• Drafting legal documents for enterprises according to the provisions of law and information provided by enterprises;
• The authorized representative of the customer to carry out the procedures for franchising at the competent state agencies;
• Monitor the processing of dossiers by competent state agencies, explain to state agencies on issues related to dossiers;
• Guide businesses to carry out legal procedures arising after franchising.

If you need advice, for more detailed information and how to use this service, please contact the Deputy Director in charge of business directly: Nhat Nam Lawyer via hotline: 0912.35.65.75, 0912.35.53.53 or call hotline 1900.6575 for the free legal advice or send a service request via email: lienheluathongbang@gmail.com

Wish you and your family healthy, peaceful and successful!

Sincerely!