Gregory SyおよびCurrieリー著

中国のWTOへの市場そして最近の連続の入り口によって、それは過去の二十年の急速な開発を経た。 、それはそのような成長がそして大きい1.3十億人の人口(アメリカの300,000,000の総人口と比べる単独で中流階級の330百万)を伴って一部には原因で最も大きい世界けれども`の未開発の」消費市場を表す。 頻繁に無秩序のおよび分解された消費者セクター(特に食糧および個人的なサービス産業)にブランド認識および組織的組織構造と関連付けられた信頼性を販売するように努めている多くのフランチャイザーのための中国は両方21世紀以内に最も大きくけれどもほとんどの挑戦的な機会である。 

幸いにも両方の消費者および一手販売許可工業の消費者のために、このセクターの最も大きい自由化をもたらされる2007年恐らく間違いなくので1979年の改良を「開発すること」。 

消費者お馴染みの名前、マクドナルドのような、KFCおよびPIZZA HUTになる中国の市場の変更中それ」突き出られる`がある誰が、しかし言われる、その外国のフランチャイザー、以前、成功および失敗の多数の彼らの分け前をの見た。    

I。 中国の特権の市場の開発

1997年に、中国の内部貿易の大臣は公表した 商業特権のプロシージャの管理 (試験の実施は以下「プロシージャ」に特権を与え、)規則の最初のセットを表すことは特権のセクターに関してとりわけ問題を扱うことで指示した。 The Franchise Procedures introduced two types of franchises: direct franchising and sub-franchising. The Franchise Procedures provided for the basic structure of current franchising laws, which requires the disclosure of material information to prospective franchisees and includes the following: basic information about the franchisor; operational results of the franchisor; financial results of its franchise outlets; fees and payment obligations; and, terms and conditions for goods and services provided to franchisees. The Franchise Procedures also established the quasi-governmental China Chain Store and Franchise Association (“CCFA”). (Note that the Franchise Procedures were interpreted as not being applicable to cross-border franchise operations.)

In 2004, as part of China’s accession into the World Trade Organization (WTO) and  commitment to the principles therein, the Ministry of Commerce issued the Measures for the Administration of Franchise Operations (“Franchise Measures”) effective February 1st, 2005.  The Franchise Measures were promulgated shortly after the Measures on the Administration of Foreign Investment in the Commercial Sector, which liberalized foreign investment in the retail and wholesale distribution industry. Unlike the Franchise Procedures, the Franchise Measures not only permit foreign investment in the franchising sector but also contain an entire chapter drafted exclusively for this purpose. 

Much like the Franchise Procedures, the Franchise Measures focused largely on franchisor disclosure, but also included the “two-plus-one” requirement, which mandated franchisors to operate two company-owned stores in China prior to commencing franchising activities. Obviously, this has prevented many start-up franchisors from immediately commencing operations in China and was a disincentive for market entry. Moreover, the promulgation of the Franchise Measures and the requirement that all franchising operations be conducted only by PRC entities has effectively removed the alternative measures being used by foreign franchisors for many years, including licensing arrangements and international franchising agreements.  

There have, however, been recent modifications to the franchising framework with the promulgation of a number of new laws in 2007 which will be further discussed below.

II. Current Legal Framework and Franchising Structures in China

In May of 2007, MOFCOM replaced the Franchise Measures (2005) with the Regulations on the Administration of Commercial Franchises (“Franchise Regulations”). The Franchise Regulations, together with the MOFCOM-issued Administrative Measures for the Information Disclosure of Commercial Franchises (“Information Disclosure Measures”) and the Administrative Measures for Archival Filing of Commercial Franchises (“Archival Filing Measures”) currently govern franchising structures in China and set out the following requirements:

1. Definition and Applicability Scope of Commercial Franchises
Article 2 of the Franchise Regulations states that the regulations are applicable to all investors engaged in commercial franchise operations in China.

“Commercial Franchise” is defined in the Franchise Regulations as “business activities whereby a franchisor, through execution of agreements, allows a franchisee to use operational resources, such as a trademark, logo, patent, know-how and others which are owned by the franchisor [refers to legal (not natural) persons], and the franchisee conducts business under the unified business model in accordance with the provisions of the contract and pays franchise fees to the franchisor.

2. Qualifications and the Two-Plus-One Rule
Franchisors must own a well-developed business model, and be capable of providing continued operational management, technical support, business training and other services to the franchisee. 

Additionally, franchisors must own at least two company-owned stores for a period of at least one year. Noticeably missing is the phrase “in China”, which allows for new foreign entrants to immediately commence franchising activities in China.

Gregory M. Sy is a partner / foreign counsel with Grandall Legal Group. His practice includes general business advisory for SME’s in China, particularly in the areas of international corporate structuring and transactions. Representative clients include the Consulate of the United States of America in China (Shenyang), Embassy of Brazil, various publicly listed companies (NYSE, LSE, DAX, and BSE), along with numerous other SME’s operating in a wide range of industries. Mr. Sy obtained an LL.B. from the University of Victoria, and is admitted to the New York bar. Gregory publishes extensively on a variety of China legal issues for international and local publications, and has recently acted as chief editor for Martindale’s China Law Digest. You can contact Gregory at gregsy@grandall.com.cn or learn more about the firm at www.grandall-profile.com.

This is the first part of “How to negotiate a purchase contract with Chinese supplier properly?” Next week we will publish the second part.