Ministry of Commerce, Measures for the Administration of Information Disclosure in Connection with Commercial Franchising

商务部商业特许经营信息披露管理办法

June 02, 2007 | BY

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Franchisors required to disclose certain information to their franchisees before signing the contract.

Clp Reference: 5400/07.04.30 Promulgated: 2007-04-30 Effective: 2007-05-01

Promulgated: April 30 2007
Effective: May 1 2007

Main Contents: At least 30 days prior to the conclusion of a franchise contract, the franchisor shall disclose the following information to the franchisee in writing:

(1) basic particulars of the franchisor and the franchise activities;

(2) basic information on the business resources owned by the franchisor;

(3) basic information on the franchise fees;

(4) details, such as the price of and conditions under which products, services and equipment are provided to the franchisee;

(5) details of the continuing services to be provided to the franchisee;

(6) the method and details of the guidance and monitoring of the franchisee's business activities;

(7) details of the investment budget for franchise outlets;

(8) relevant information on franchisees in China;

(9) abstracts of the franchisor's financial accounting reports and audit reports for the most recent two years audited by an accounting firm or auditing firm;

(10) details of material lawsuits or arbitration proceedings relating to the franchise in which the franchisor was involved during the most recent five years;

(11) details of the record of major illegal operations by the franchisor and its legal representative and such record; and

(12) the franchise contract.

Related Legislation: Regulations for the Administration of Commercial Franchising, Feb 6 2007, CLP 2007 No.2 p.18

Full Analysis & Translation: See page 60

clp reference:5400/07.04.30(2)prc reference:商务部令 [2007] 第 16 号promulgated:2007-04-30effective:2007-05-01

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