Administrative Measures for the Record Filing of Commercial Franchises

Order of the Ministry of Commerce [2011] No.5

 

The revised Administrative Measures for the Record Filing of Commercial Franchises which was deliberated and adopted at the 56th executive meeting of the ministry of commerce on November 15) will be repealed simultaneously.

Minister: Chen Deming
December 12, 2011

Administrative Measures for the Record Filing of Commercial Franchises

Article 1 In order to strengthen the administration of commercial franchise activities and standardize the order of the franchise market, these Measures is formulated in accordance with the relevant provisions of the Administrative Regulations on Commercial Franchising (hereinafter referred to as the Regulations).

Article 2 These Measures apply to commercial franchise activities within the territory of the People's Republic of China (hereinafter referred to as the territory ofChina).

Article 3 The Ministry of Commerce and the competent commerce departments of the people's governments of all provinces, autonomous regions and municipalities directly under the Central Government shall be the authorities responsible for the record filing of commercial franchises. If commercial franchise activities are conducted within any province, autonomous region or a municipality directly under the Central Government, filing shall be made with the competent commerce department of the province, autonomous region or municipality directly under the Central Government where the franchisor is located; if commercial franchise activities are conducted between two or more provinces, autonomous regions, or municipalities directly under the Central Government, files shall be made with the Ministry of Commerce.

Commercial franchises shall be subject to national network-based filing. Franchisors who comply with the provisions of the Regulations shall, in accordance with the law, make filing through commercial franchise information management system established by the Ministry of Commerce.

Article 4 The Ministry of Commerce may, according to the relevant provisions, entrust the competent commerce department of the people's government of the relevant province, autonomous region and municipality directly under the Central Government to complete the filings of commercial franchises conducted between two or more provinces, autonomous regions or municipalities directly under the Central Government. The entrusted competent commerce department of the people's government of the province, autonomous region or municipality directly under the Central Government shall complete the filing work on its own and shall not entrust any other organization or individual to handle the filing work.

If the entrusted competent commerce department of the people's government of the province, autonomous region or municipality directly under the Central Government fails to perform the duties of filing in accordance with the law, the Ministry of Commerce may directly accept the filing applications of the relevant franchisors.

Article 5 Any entity or individual shall has the power to report any violations of these Measures to the competent commerce department. The competent commerce department shall deal with the reported violations in accordance with the law.

Article 6 Any franchisor who apply for filing shall submit the following materials to the filing authority:

1. Basic information on commercial franchise;

2. Distribution of stores of all franchisees within the territory of China;

3. The marketing plan of the franchisor;

4. Business license for enterprises with legal person status or other certificates for the qualifications of subjects;

5. Registration certificates for trademark rights, patent rights and other business operation resources related to franchise activities;

6. Proof documents which comply with Paragraph 2 of Article 7 of the Regulations;

For any franchisor who had conducted commercial franchise activities before May 1, 2007, the provisions of the preceding paragraph shall not be applicable when application materials for the filing of commercial franchise are submitted;

7. The first franchise contract concluded with any franchisee within the territory of China;

8. The model franchise contract;

9. the contents of the franchise operation manual (the number of pages within each chapter and the total number of pages of the manual shall be stated and if such manual is provided through the internal network of the franchise system, the estimated number of pages shall be provided);

10. For products and services for which franchise shall be conducted with approval in accordance with the provisions of the national laws and regulations, the approval documents of the relevant competent departments shall be submitted.

Foreign-invested enterprises shall submit the Approval Certificate for Foreign-Invested Enterprises and the business scope of the Approval Certificate for Foreign-Invested Enterprises shall include projects in which commercial activities are conducted by way of franchise;

11. Commitment of the franchisor signed by its legal representative and stamped with its common seal; and

12. Other materials which shall be submitted in the opinion of the filing authority.

If any of the aforesaid documents is formed outside the People's Republic of China, it shall be notarized by a notary institution in the country in which it is formed (attached with a Chinese translation) and be certified by the embassy or consulate of the People's Republic of China in the country, or go through the certification procedures specified in the relevant treaty signed by the People's Republic of China with the country. If it is formed in Hong Kong, Macao and Taiwan, it shall perform the relevant certification procedures.

Article 7 A franchisor shall, within 15 days of the date on which it initially concludes a franchise contract with any franchisee within the territory of China, apply for filing with the filing authority.

Article 8 If a change in any of the following filing information of a franchisor occurs, the franchisor shall, within 30 days of the date on which the change occurs, apply for modification with the filing authority:

1. Information on the industrial and commercial registration of the franchisor;

2. Information on business resources; or

3. The distribution of stores of all franchisees within the territory of China.

Article 9 A franchisor shall, before March 31 in each year, report to the filing authority the conclusion, cancellation, termination and renewal of the franchise contract in the previous year.

Article 10 A franchisor shall earnestly fill up information on all filing matters and ensure that such information is genuine, accurate and complete.

Article 11 The filing authority shall, within 10 days of the date on which documents and materials which comply with the provisions of Article 6 hereof and which are submitted by a franchisor are received, handle the filing and make an announcement through the commercial franchise information management system.

If documents and materials submitted by a franchisor are incomplete, the filing authority may require it to submit additional documents and materials within 7 days. The filing authority shall, within 10 days of the date on which the materials of the franchisor are complete, handle the filing.

Article 12 If any franchisor who has been filed falls under any of the following circumstances, the filing authority may cancel the filing and make an announcement through the commercial franchise information management system:

1. Where the franchisor cancels the industrial and commercial registration or the competent authority revokes its business license as a result of any illegal business operations;

2. Where the filing authority receives any judicial advice on the cancellation of filing made by the judicial authority as a result of the franchisor's illegal business operations;

3. Where the franchisor conceals the relevant information or provides false information, resulting in a major impact;

4. Where the franchisor applies for the cancellation of filing and obtains the consent of the filing authority; or

5. Any other circumstances in which the filing needs to be cancelled.

Article 13 The competent commerce departments of the people's governments of all provinces, autonomous regions and municipalities directly under the Central Government shall report the filings and the cancellation of filings to the Ministry of Commerce within 10 days.

Article 14 The filing authority shall record and keep the filing information materials of a franchisor in a complete and accurate manner and keep confidential the trade secrets of the franchisor in accordance with the law.

The competent commerce department of the people's government of the place (a province, autonomous region, municipality or city divided into districts) where a franchisor is located may issue the filing certificate to the franchisor who has been filed.

Article 15 The general public may inquire about the following information through the commercial franchise information management system:

1. The enterprise name of a franchisor and business resources used in franchise business such as the registered trademarks, enterprise logos, patents, and proprietary technologies;

2. The filing time of a franchisor;

3. The address of the legal business place of a franchisor, its contact details and the name of its legal representative; and

4. The distribution of stores of all franchisees within the territory of China.

Article 16 If a franchisor fails to make the filing in accordance with the provisions of the Regulations and these Measures, the competent commerce department at and above the level of the city divided into districts shall order it to make the filing within a specified time limit and impose a fine of more than 10,000 yuan and less than 50,000 yuan; if it fails to make the filing within the specified time limit, the competent commerce department shall impose a fine of more than 50,000 yuan and less than 10,000 yuan and make an announcement.

Article 17 If a franchisor violates the provisions of Article 11 hereof, the competent commerce department at and above the level of the city divided into districts shall order it to make corrections and may impose a fine of less than 10,000 yuan; if the circumstances involved are serious, the competent commerce department shall impose a fine of more than 10,000 yuan and less than 50,000 yuan and make an announcement.

Article 18 All overseas franchisors must follow these Measures in order to conduct franchise activities within the territory of China. Franchisors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region shall also be governed by these Measures.

Article 19 Relevant industry associations shall, in accordance with the provisions of these Measures, strengthen industrial self-discipline and guide franchisors to make filings in accordance with the law.

Article 20 The Ministry of Commerce shall be responsible for the interpretation of these Measures.

Article 21 These Measures shall come into effect on February 1, 2012. The Administrative Measures for the Record Filing of Commercial Franchises (Order of the Ministry of Commerce [2007] No.15) which came into effect on May 1, 2007 shall be repealed simultaneously.