China Franchise Law for Foreign Businesses

Franchising can be an effective way to expand into China without establishing your own operations. However, China has specific franchise regulations that foreign businesses must understand and comply with.

Legal Framework

Key regulations governing franchising in China:

What Qualifies as a Franchise?

Under Chinese law, a franchise involves:

Key Requirements

Two-Store-One-Year Rule

Before franchising in China, franchisor must have:

Important: Failure to meet the 2+1 requirement can make franchise agreements voidable and expose you to penalties.

Filing Requirement

Franchisors must file with MOFCOM:

Disclosure Obligations

Must provide franchisees with detailed information at least 30 days before signing:

Franchise Agreement Essentials

Chinese law requires certain terms:

Cooling-Off Period

Franchisees have the right to:

IP Protection

Critical considerations:

Common Pitfalls

Enforcement and Disputes

If problems arise:

Planning to Franchise in China?

I help foreign businesses structure compliant franchise programs in China, from registration to agreement drafting and dispute resolution.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. For advice on your specific situation, please contact me directly.

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