Franchise in China--Opportunities & Challenges Come Along with the New Law

With the recent promulgation of the Commercial Franchise Information Disclosure Management Measures (“Disclosure Guidelines”) and Commercial Franchise Registration Management Measures (“Registration Guidelines”), the Chinese franchise regulatory framework is basically complete. The two Guidelines were drafted and promulgated in accordance with the Regulations of the Commercial Franchise Operations (“Regulations”), and they supplement the Regulations with specific details on its enforcement. Even though the two Guidelines have eliminated a lot of uncertainty in the Regulations, they still have potential pitfalls for foreign franchisors in their compliance measures. The next two blogs aim to to expose the areas where dangers lurk in a franchisor’s attempt to comply with the Guidelines.