Under the new measures, restrictions on market access and national treatment for franchising will be removed in line with China’s WTO commitments. Drawing on the experience of developed countries, detailed provisions are made for franchising parties, franchise contracts, information disclosure, advertising and publicity, supervision and management, foreign-invested enterprises (FIEs) engaging in franchising business, legal liability and other issues.

The new measures will apply to all enterprises engaged in commercial franchising in China. In addition to providing franchisees with guidance in conducting their business as well as training and a stable supply system, a franchisor is required to have at least two direct outlets established by itself or its subsidiary or holding company with a history of over one year within the territory of China.

The franchisor should file the trademark licence contract for the record in accordance with China’s Trademark Law and other regulations before launching its franchising business.

FIEs wishing to engage in commercial activities by means of franchising should apply to the department that originally approved its establishment to have “commercial franchising” included in its scope of business.