INVESTMENT GUIDE

FRANCHISING

Commercial franchise means a commercial activity whereby franchisors permit and require franchisees to undertake by themselves to purchase or sell goods or provide services on the following conditions:  – The purchase or sale of goods or provision of services shall be conducted in accordance with methods of business organization prescribed by franchisors and associated with the franchisors’ trademarks, trade names, business knows-how, business slogans, business logos and advertisements.  – Franchisors shall be entitled to supervise and assist franchisees in conducting their business activities. 
Conditions for the franchisor  A trader shall be permitted to grant commercial rights when fully satisfying the following conditions:  – The business system intended for franchise has been in operation for at least one year. Where a Vietnamese trader is the primary franchisee of a foreign franchisor, such Vietnamese trader must conduct business by mode of commercial franchising for at least one year in Vietnam before sub-franchising.  – Such trader has registered commercial franchising with the competent agency.  – The in-business goods and/or services covered by commercial rights are those not on the list of goods and services banned from business. In cases where goods and services are restricted from business or those on the list of goods and services subject to conditional business, enterprises shall be permitted to do business only after being granted business licenses or papers of equivalent value by the branch-managing agencies or fully satisfying business conditions.
Conditions for the franchisee  A trader shall be permitted to receive commercial rights when having the registration of business lines subject to commercial rights.
Registration of commercial franchises Before granting commercial franchises, intended franchisors must register them with the competent State authority. The Ministry of Commerce and Industry shall register the commercial franchises from overseas into Vietnam, including commercial franchises from export processing zones, non-tariff areas or separate customs areas specified by Vietnamese law into the Vietnamese territory.