Commercial Franchise Management Measures

Chapter 1 General Provisions Article 1 These Measures are formulated to regulate commercial franchising activities, protect the legitimate rights and interests of the parties, and promote the healthy and orderly development of commercial franchising. Article 2 The term "commercial franchising" (hereinafter referred to as "franchising") as mentioned in these Measures means that by signing a contract, the franchisor will grant the trademark, trade name, business model and other business resources that it has the right to grant to others for use to the franchisee; the franchisee The person engages in business activities under a unified operating system in accordance with the contract and pays franchise fees to the franchisor. Article 3 These Measures shall apply to franchise activities carried out within the territory of the People’s Republic of China. Article 4 The franchisor may, in accordance with the contract, directly grant the franchise right to the franchisee, and the franchisee invests in establishing a franchise outlet to carry out business activities, but may not sub-license the franchise right again; or transfer the exclusive franchise within a certain area to the franchisee. The operating rights are granted to the franchisee, who can grant the franchise rights to other applicants or set up his own franchise outlets in the area. Article 5 Franchising operations shall abide by the laws and regulations of the People's Republic of China, follow the principles of voluntariness, fairness, honesty, and credibility, and shall not damage the legitimate rights and interests of consumers.

The franchisor shall not illegally engage in pyramid schemes in the name of franchising.

The franchisor’s business activities in the form of franchising shall not lead to market monopoly or hinder fair competition. Article 6 The Ministry of Commerce shall supervise and manage franchise activities nationwide, and the competent commerce departments at all levels shall supervise and manage franchise activities within their jurisdiction. Chapter 2 Franchise Parties Article 7 The franchisor shall meet the following conditions:

(1) An enterprise or other economic organization established in accordance with the law;

(2) Having the right to license others The trademarks, trade names, business models and other business resources used;

(3) The ability to provide long-term business guidance and training services to the franchisee;

(4) In China Have at least two direct-operated stores that have been in operation for more than one year or directly-operated stores established by its subsidiaries or holding companies;

(5) For franchise operations that require the franchisor to supply goods, the franchisor shall have A stable and quality-guaranteed goods supply system and the ability to provide related services;

(6) Have a good reputation and have no record of engaging in fraudulent activities through franchising. Article 8 The franchisee shall meet the following conditions:

(1) An enterprise or other economic organization established in accordance with the law;

(2) Possessing funds and fixed assets suitable for the franchise operation. Places, people, etc. Article 9 The franchisor shall enjoy the following rights:

(1) To ensure the unity of the franchise system and the consistency of the quality of products and services, supervise the business activities of the franchisee in accordance with the contract;

(2) For franchisees who violate the provisions of the franchise contract, infringe upon the legitimate rights and interests of the franchisor, and destroy the franchise system, their franchise qualifications shall be terminated in accordance with the contract;

(3) Collect franchise fees and deposits in accordance with the contract;

(4) Other rights agreed in the contract. Article 10 The franchisor shall perform the following obligations:

(1) Disclose information in a timely manner in accordance with the relevant provisions of these Measures;

(2) Grant the franchise right to the franchisee for use and provide The business logo and operating manual representing the franchise system;

(3) Provide the franchisee with the sales, business or technical guidance, training and other services necessary to carry out the franchise;

(4) Provide goods supply to the franchisee in accordance with the contract. Except for exclusive products and goods that must be provided by the franchisor or the supplier designated by the franchisor to ensure franchise quality, the franchisor may not force the franchisee to accept the supply of its goods, but may stipulate the quality standards that the goods should meet, or propose Several suppliers for the franchisee to choose from;

(5) The franchisor shall be responsible for guaranteeing the product quality of its designated suppliers;

(6) Promotion and advertising agreed in the contract Publicity;

(7) Other obligations stipulated in the contract.

Article 11 The franchisee shall enjoy the following rights:

(1) Obtain the trademark, trade name, business model and other business resources authorized by the franchisor;

(2) Obtain the franchisor’s authorization to use The training and guidance provided;

(3) Obtain the supply of goods provided or arranged by the franchisor in a timely manner according to the price agreed in the contract;

(4) Obtain the franchisor to carry out unified Promotional support;

(5) Other rights stipulated in the contract. Article 12 The franchisee shall perform the following obligations:

(1) Carry out business activities in accordance with the contract;

(2) Pay franchise fees and deposits;

(3) Maintain the unity of the franchise system and shall not transfer the franchise right without the permission of the franchisor;

(4) Provide the franchisor with the true operating conditions, financial status and other contracts in a timely manner Agreed information;

(5) Accept the guidance and supervision of the franchisor;

(6) Keep the franchisor’s business secrets;

(7) Contract Other obligations agreed upon. Chapter 3 Franchise Contract Article 13 The content of the franchise contract shall be agreed upon by the parties and generally includes the following contents:

(1) Name and residence of the parties;

(2) The content, term, location and exclusivity of the authorized use of the franchise;

(3) Type, amount, payment method of franchise fee and method of collection and return of deposit;

(4) Confidentiality clause;

(5) Franchise product or service quality control and responsibility;

(6) Training and guidance;

(7) Use of trade names;

(8) Use of trademarks and other intellectual property rights;

(9) Consumer complaints;

(10) Publicity and advertising;

(11) Change and termination of contract;

(12) Liability for breach of contract;