Franchising is a regular activity in Vietnam. Many businesses actively seek business opportunities through franchising with brands. However, in some cases, according to the law, businesses need to register for franchising, the following article will help readers understand more about this issue.

Registration of franchising

According to the provisions of the Commercial Law 2019, 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 by methods of business organization prescribed by franchisors and associated with the franchisors’ trademarks, trade names, business know-how, business slogans, business logos, and advertisements.
• Franchisors shall be entitled to supervise and assist franchisees in conducting their business activities.

Conditions for registering a franchise

• Franchise activities must be registered with the Ministry of Industry and Trade.
• Franchise traders must satisfy the following conditions: The business system intended to be used for franchising has been in operation for at least 1 year. (Article 8 Decree No. 08/2018/ND-CP amending Article 5 of Decree No. 35/2006/ND-CP dated March 31, 2006).

Franchise registration procedures

Necessary dossier

• An application for commercial franchising registration (according to form MĐ-1 in Appendix II issued together with Circular 09/2006/TT-BTM);
• A written description of the commercial franchise (according to the form in Appendix III issued together with Circular 09/2006/TT-BTM);
• A notarized copy of the business registration certificate or investment certificate, in case of commercial franchises from Vietnam to overseas; a copy of the foreign trader’s business registration certificate or paper of equivalent validity, certified by a competent agency of the place where the foreign trader is set up, in case of commercial franchises from overseas into Vietnam;
• A notarized copy of the industrial property right protection title in Vietnam or a foreign country, in case of licensing industrial property subject matters for which protection titles have been granted;
• Papers proving the approval of the primary franchisor’s permission of franchise in case the trader registering to the franchise is the secondary franchisor.

Note that: The above documents must be consular legalized by Vietnamese law.

Implement procedure

• An intended commercial franchisor sending a dossier of application for registration of franchising to the Ministry of Industry and Trade;
• Within 5 working days of receiving a complete and valid dossier, the competent state agency shall register franchising in the franchising register and notify in writing the traders of such registration.
• Where the dossier is incomplete or invalid, the competent state agency shall, within 2 working days after receiving the such dossier, notify such in writing the intended franchisor for supplementation and completion of its dossier;
• If the competent state agency refuses to effect the registration, it must notify such in writing to the intended franchisor, clearly stating the reasons for refusal.

Note that: In the following cases, registration of commercial franchising is not required

• Domestic commercial franchising;
• Vietnam-to-overseas commercial franchising.

Cases in which registration of commercial franchising is not required must be reported to provincial-level Industry and Trade Departments no later than January 15 of each year according to the form in Part B, Appendix III of Circular 09/2006/TT-BTM.