A franchise contract may have the following contents:
Contents of Franchise right
This clause defines the subject matter of the contract, which is considered the heart of the contract. This provision affects all other terms of the contract.
Rights, obligations of the franchisor
Rights of franchisor:
Unless otherwise agreed, franchisors have the following rights:
Firstly, receiving franchise money;
Secondly, organizing advertising for the franchise system and franchise network;
Thirdly, periodically or irregularly inspecting the franchisee’s activities to ensure the consistency of the franchise system and the stability of the quality of goods and services.
Obligations of franchisor:
Unless otherwise agreed, franchisors have the following obligations:
Firstly, providing guidelines on the franchise system for franchisees;
Secondly, providing initial training and regular technical assistance to franchisees in order to properly operate the franchise system;
Thirdly, designing and arranging sales and service provision locations at the franchisee’s expense;
Fourthly, ensuring the intellectual property rights to the objects stated in the franchise contract;
Fifthly, treating franchisees equally in the franchise system.
Rights, obligations of the franchisee
Rights of franchisee:
Unless otherwise agreed, franchisees have the following rights:
Firstly, requesting the franchisor to provide adequate technical assistance related to the franchising system;
Secondly, requiring franchisees to treat other franchisees equally in the franchise system.
Obligations of franchisee:
Unless otherwise agreed, franchisees have the following obligations:
Firstly, paying the franchise and other payments under the franchise contract;
Secondly, investing enough physical facilities, financial resources, and human resources to receive the rights and business know-how transferred by the franchisor;
Thirdly, accepting the franchisor’s control, supervision, and guidance; comply with the requirements on design, arrangement of sales, and service provider of the franchisor;
Fourthly, keeping the franchised business secret, even after the franchise contract ends or terminates;
Fifthly, stop using the trademark, trade name, business slogan, business logo and other intellectual property rights (if any) or the franchisor’s system upon termination or termination of the contract. co-franchise;
Sixthly, operating operations in accordance with the franchise system;
Seventhly, no sub-franchise is allowed without the consent of the franchisor.
Pricing, recurring franchise fees, and payment methods
This term is agreed upon by the parties. The law does not prescribe a fixed price for each good, but the parties base on the reputation of the goods, the franchise area and the market demand, etc. to decide the price and payment fee and choose a payment method to suit the conditions of the parties.
Duration of contract
The term of the commercial franchise contract shall be agreed upon by the parties.
A franchise contract may be terminated before the agreed time limit in the following cases:
Firstly, the franchisee has the right to unilaterally terminate the franchise contract in case the franchisor violates the obligations specified in Article 287 of the Commercial Law.
Secondly, the franchisor has the right to unilaterally terminate the franchise contract in the following cases: The franchisor no longer has a business license or an equivalent document that, according to law, the right to do business under the franchise method; The franchisee is dissolved or goes bankrupt in accordance with Vietnamese law; The franchisee commits serious legal violations that are likely to cause great damage to the reputation of the franchise system; Franchisee fails to remedy a non-essential breach of the franchise agreement within a reasonable time, even though it has received written notice of such breach from Franchisor.
Contract extension, termination and dispute resolution
Contract extension: When the contract expires, the parties can agree to extend the contract.
Contract termination: The contract will terminate in the following cases: (i) Expiry of the contract performance term but the parties do not agree on an extension; (ii) The contract has not expired but the parties agree to terminate it; (iii) One party unilaterally terminates the contract ahead of time.
Dispute resolution: Forms of commercial dispute settlement include: (i) Negotiation between parties; (ii) Mediation between the parties is chosen by an agency, organization or individual as agreed upon by the parties to act as a mediator; (iii) Settlement at Arbitration or Court; (iv) Starting from the right to do business, the parties to the franchise contract have the freedom to choose one of three forms of dispute resolution.
For more information, please contact:
APRA LAW FIRM
Address: 7th Floor, 57 Tran Quoc Toan, Tran Hung Dao Ward, Hoan Kiem District, Hanoi City, Vietnam.
Hotline: 024.23486234 – 0948495885